TARGA RESOURCES CORP (TRGP) Stock Fundamental Analysis
NYSE:TRGP - New York Stock Exchange, Inc. - US87612G1013 - Common Stock - Currency: USD
TRGP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 211 industry peers in the Oil, Gas & Consumable Fuels industry. While TRGP is still in line with the averages on profitability rating, there are concerns on its financial health. TRGP is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
TRGP had positive earnings in the past year.
In the past year TRGP had a positive cash flow from operations.
In multiple years TRGP reported negative net income over the last 5 years.
In the past 5 years TRGP always reported a positive cash flow from operatings.
1.2 Ratios
TRGP's Return On Assets of 5.24% is fine compared to the rest of the industry. TRGP outperforms 61.14% of its industry peers.
TRGP's Return On Equity of 48.76% is amongst the best of the industry. TRGP outperforms 94.31% of its industry peers.
TRGP has a better Return On Invested Capital (10.70%) than 79.15% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TRGP is significantly below the industry average of 23.70%.
The 3 year average ROIC (10.47%) for TRGP is below the current ROIC(10.70%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.24% | ||
| ROE | 48.76% | ||
| ROIC | 10.7% |
ROA(3y)4.73%
ROA(5y)0.69%
ROE(3y)37.62%
ROE(5y)11.05%
ROIC(3y)10.47%
ROIC(5y)9.38%
1.3 Margins
TRGP has a Profit Margin (7.30%) which is in line with its industry peers.
With a Operating Margin value of 15.87%, TRGP perfoms like the industry average, outperforming 47.87% of the companies in the same industry.
TRGP's Operating Margin has improved in the last couple of years.
TRGP has a Gross Margin of 34.42%. This is comparable to the rest of the industry: TRGP outperforms 45.02% of its industry peers.
In the last couple of years the Gross Margin of TRGP has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.87% | ||
| PM (TTM) | 7.3% | ||
| GM | 34.42% |
OM growth 3Y28.03%
OM growth 5Y22.99%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y22.2%
GM growth 5Y3.32%
2. Health
2.1 Basic Checks
TRGP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, TRGP has less shares outstanding
The number of shares outstanding for TRGP has been reduced compared to 5 years ago.
The debt/assets ratio for TRGP has been reduced compared to a year ago.
2.2 Solvency
TRGP has an Altman-Z score of 2.23. This is not the best score and indicates that TRGP is in the grey zone with still only limited risk for bankruptcy at the moment.
TRGP's Altman-Z score of 2.23 is fine compared to the rest of the industry. TRGP outperforms 71.56% of its industry peers.
The Debt to FCF ratio of TRGP is 25.35, which is on the high side as it means it would take TRGP, 25.35 years of fcf income to pay off all of its debts.
TRGP has a Debt to FCF ratio of 25.35. This is comparable to the rest of the industry: TRGP outperforms 44.08% of its industry peers.
A Debt/Equity ratio of 6.34 is on the high side and indicates that TRGP has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 6.34, TRGP is doing worse than 90.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.34 | ||
| Debt/FCF | 25.35 | ||
| Altman-Z | 2.23 |
ROIC/WACC1.28
WACC8.35%
2.3 Liquidity
A Current Ratio of 0.65 indicates that TRGP may have some problems paying its short term obligations.
TRGP has a worse Current ratio (0.65) than 79.15% of its industry peers.
TRGP has a Quick Ratio of 0.65. This is a bad value and indicates that TRGP is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.57, TRGP is doing worse than 76.30% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.57 |
3. Growth
3.1 Past
TRGP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.40%, which is quite good.
Measured over the past years, TRGP shows a very strong growth in Earnings Per Share. The EPS has been growing by 45.97% on average per year.
The Revenue has been growing slightly by 1.73% in the past year.
Measured over the past years, TRGP shows a quite strong growth in Revenue. The Revenue has been growing by 13.57% on average per year.
EPS 1Y (TTM)11.4%
EPS 3Y45.97%
EPS 5YN/A
EPS Q2Q%-25.41%
Revenue 1Y (TTM)1.73%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%-0.02%
3.2 Future
Based on estimates for the next years, TRGP will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.08% on average per year.
Based on estimates for the next years, TRGP will show a small growth in Revenue. The Revenue will grow by 5.15% on average per year.
EPS Next Y37.82%
EPS Next 2Y28.78%
EPS Next 3Y24.16%
EPS Next 5Y16.08%
Revenue Next Year25.29%
Revenue Next 2Y18.09%
Revenue Next 3Y10.19%
Revenue Next 5Y5.15%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
TRGP is valuated quite expensively with a Price/Earnings ratio of 32.00.
TRGP's Price/Earnings ratio is a bit more expensive when compared to the industry. TRGP is more expensive than 62.09% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.28, TRGP is valued at the same level.
With a Price/Forward Earnings ratio of 18.24, TRGP is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TRGP is on the same level as its industry peers.
TRGP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32 | ||
| Fwd PE | 18.24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TRGP is valued a bit more expensive than the industry average as 61.14% of the companies are valued more cheaply.
The rest of the industry has a similar Price/Free Cash Flow ratio as TRGP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 59.04 | ||
| EV/EBITDA | 13.28 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
TRGP has a very decent profitability rating, which may justify a higher PE ratio.
TRGP's earnings are expected to grow with 24.16% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.85
PEG (5Y)N/A
EPS Next 2Y28.78%
EPS Next 3Y24.16%
5. Dividend
5.1 Amount
TRGP has a Yearly Dividend Yield of 2.27%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.66, TRGP has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, TRGP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.27% |
5.2 History
The dividend of TRGP decreases each year by -7.60%.
TRGP has paid a dividend for at least 10 years, which is a reliable track record.
TRGP has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-7.6%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
TRGP pays out 55.72% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP55.72%
EPS Next 2Y28.78%
EPS Next 3Y24.16%
NYSE:TRGP (7/3/2025, 11:18:04 AM)
174.055
+0.28 (+0.16%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners92.75%
Inst Owner Change-0.08%
Ins Owners1.43%
Ins Owner Change3.23%
Market Cap37.76B
Analysts85.71
Price Target208.23 (19.63%)
Short Float %2.13%
Short Ratio2.18
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.27% |
Yearly Dividend2.8
Dividend Growth(5Y)-7.6%
DP55.72%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-40.09%
Min EPS beat(2)-54.87%
Max EPS beat(2)-25.31%
EPS beat(4)2
Avg EPS beat(4)-16.88%
Min EPS beat(4)-54.87%
Max EPS beat(4)10.02%
EPS beat(8)3
Avg EPS beat(8)-12.23%
EPS beat(12)4
Avg EPS beat(12)-16.59%
EPS beat(16)5
Avg EPS beat(16)-21.22%
Revenue beat(2)0
Avg Revenue beat(2)-6.11%
Min Revenue beat(2)-8.72%
Max Revenue beat(2)-3.5%
Revenue beat(4)0
Avg Revenue beat(4)-10.28%
Min Revenue beat(4)-21.94%
Max Revenue beat(4)-3.5%
Revenue beat(8)2
Avg Revenue beat(8)-8.69%
Revenue beat(12)3
Avg Revenue beat(12)-11.04%
Revenue beat(16)6
Avg Revenue beat(16)-4.63%
PT rev (1m)-3.58%
PT rev (3m)-5.82%
EPS NQ rev (1m)-1.02%
EPS NQ rev (3m)1.54%
EPS NY rev (1m)-0.86%
EPS NY rev (3m)-2.98%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.44%
Revenue NY rev (1m)-1.64%
Revenue NY rev (3m)-2.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32 | ||
| Fwd PE | 18.24 | ||
| P/S | 2.31 | ||
| P/FCF | 59.04 | ||
| P/OCF | 10.13 | ||
| P/B | 15.4 | ||
| P/tB | 67.96 | ||
| EV/EBITDA | 13.28 |
EPS(TTM)5.44
EY3.13%
EPS(NY)9.54
Fwd EY5.48%
FCF(TTM)2.95
FCFY1.69%
OCF(TTM)17.18
OCFY9.87%
SpS75.51
BVpS11.3
TBVpS2.56
PEG (NY)0.85
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.24% | ||
| ROE | 48.76% | ||
| ROCE | 13.26% | ||
| ROIC | 10.7% | ||
| ROICexc | 10.79% | ||
| ROICexgc | 11.95% | ||
| OM | 15.87% | ||
| PM (TTM) | 7.3% | ||
| GM | 34.42% | ||
| FCFM | 3.9% |
ROA(3y)4.73%
ROA(5y)0.69%
ROE(3y)37.62%
ROE(5y)11.05%
ROIC(3y)10.47%
ROIC(5y)9.38%
ROICexc(3y)10.57%
ROICexc(5y)9.49%
ROICexgc(3y)12.22%
ROICexgc(5y)10.81%
ROCE(3y)12.98%
ROCE(5y)11.62%
ROICexcg growth 3Y10.65%
ROICexcg growth 5Y35.31%
ROICexc growth 3Y10.05%
ROICexc growth 5Y35.4%
OM growth 3Y28.03%
OM growth 5Y22.99%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y22.2%
GM growth 5Y3.32%
F-Score5
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.34 | ||
| Debt/FCF | 25.35 | ||
| Debt/EBITDA | 3.84 | ||
| Cap/Depr | 212.97% | ||
| Cap/Sales | 18.85% | ||
| Interest Coverage | 3.31 | ||
| Cash Conversion | 92.06% | ||
| Profit Quality | 53.5% | ||
| Current Ratio | 0.65 | ||
| Quick Ratio | 0.57 | ||
| Altman-Z | 2.23 |
F-Score5
WACC8.35%
ROIC/WACC1.28
Cap/Depr(3y)176.1%
Cap/Depr(5y)139.26%
Cap/Sales(3y)13.44%
Cap/Sales(5y)10.96%
Profit Quality(3y)82.47%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)11.4%
EPS 3Y45.97%
EPS 5YN/A
EPS Q2Q%-25.41%
EPS Next Y37.82%
EPS Next 2Y28.78%
EPS Next 3Y24.16%
EPS Next 5Y16.08%
Revenue 1Y (TTM)1.73%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%-0.02%
Revenue Next Year25.29%
Revenue Next 2Y18.09%
Revenue Next 3Y10.19%
Revenue Next 5Y5.15%
EBIT growth 1Y7.01%
EBIT growth 3Y26.58%
EBIT growth 5Y39.68%
EBIT Next Year73.27%
EBIT Next 3Y27.11%
EBIT Next 5Y17.42%
FCF growth 1Y-35.51%
FCF growth 3Y-27.54%
FCF growth 5YN/A
OCF growth 1Y33.02%
OCF growth 3Y16.59%
OCF growth 5Y21.3%