TARGA RESOURCES CORP (TRGP) Stock Fundamental Analysis
USA - NYSE:TRGP - US87612G1013 - Common Stock
150.94 USD
+2.27 (+1.53%)
150.94 USD
0 (0%)
Overall TRGP gets a fundamental rating of 5 out of 10. We evaluated TRGP 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 has a correct valuation and a medium 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 has a better Return On Assets (6.48%) than 72.51% of its industry peers.
Looking at the Return On Equity, with a value of 58.90%, TRGP belongs to the top of the industry, outperforming 95.26% of the companies in the same industry.
TRGP's Return On Invested Capital of 11.93% is amongst the best of the industry. TRGP outperforms 86.26% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TRGP is significantly below the industry average of 21.53%.
The last Return On Invested Capital (11.93%) for TRGP is above the 3 year average (10.47%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.48% | ||
| ROE | 58.9% | ||
| ROIC | 11.93% |
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
Looking at the Profit Margin, with a value of 8.93%, TRGP is in line with its industry, outperforming 53.08% of the companies in the same industry.
TRGP has a Operating Margin (17.60%) which is in line with its industry peers.
TRGP's Operating Margin has improved in the last couple of years.
TRGP's Gross Margin of 35.70% is in line compared to the rest of the industry. TRGP outperforms 46.45% of its industry peers.
In the last couple of years the Gross Margin of TRGP has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.6% | ||
| PM (TTM) | 8.93% | ||
| GM | 35.7% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TRGP is creating some value.
The number of shares outstanding for TRGP has been reduced compared to 1 year ago.
TRGP has less shares outstanding than it did 5 years ago.
TRGP has a better debt/assets ratio than last year.
2.2 Solvency
TRGP has an Altman-Z score of 2.12. 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.
With a decent Altman-Z score value of 2.12, TRGP is doing good in the industry, outperforming 69.19% of the companies in the same industry.
TRGP has a debt to FCF ratio of 39.42. This is a negative value and a sign of low solvency as TRGP would need 39.42 years to pay back of all of its debts.
With a Debt to FCF ratio value of 39.42, TRGP perfoms like the industry average, outperforming 41.23% of the companies in the same industry.
TRGP has a Debt/Equity ratio of 6.21. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of TRGP (6.21) is worse than 90.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.21 | ||
| Debt/FCF | 39.42 | ||
| Altman-Z | 2.12 |
ROIC/WACC1.49
WACC8%
2.3 Liquidity
TRGP has a Current Ratio of 0.69. This is a bad value and indicates that TRGP is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.69, TRGP is not doing good in the industry: 76.78% of the companies in the same industry are doing better.
A Quick Ratio of 0.56 indicates that TRGP may have some problems paying its short term obligations.
TRGP has a Quick ratio of 0.56. This is in the lower half of the industry: TRGP underperforms 78.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 46.21% over the past year.
TRGP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 45.97% yearly.
TRGP shows a small growth in Revenue. In the last year, the Revenue has grown by 5.03%.
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)46.21%
EPS 3Y45.97%
EPS 5YN/A
EPS Q2Q%115.79%
Revenue 1Y (TTM)5.03%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%19.6%
3.2 Future
TRGP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.08% yearly.
The Revenue is expected to grow by 5.98% on average over the next years.
EPS Next Y43.48%
EPS Next 2Y31.29%
EPS Next 3Y26.38%
EPS Next 5Y16.08%
Revenue Next Year11.71%
Revenue Next 2Y16.28%
Revenue Next 3Y11.76%
Revenue Next 5Y5.98%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
TRGP is valuated rather expensively with a Price/Earnings ratio of 21.62.
TRGP's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.69. TRGP is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 15.22, the valuation of TRGP can be described as correct.
TRGP's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.18, TRGP is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.62 | ||
| Fwd PE | 15.22 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TRGP is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as TRGP.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 75.98 | ||
| EV/EBITDA | 10.88 |
4.3 Compensation for Growth
TRGP's 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.
A more expensive valuation may be justified as TRGP's earnings are expected to grow with 26.38% in the coming years.
PEG (NY)0.5
PEG (5Y)N/A
EPS Next 2Y31.29%
EPS Next 3Y26.38%
5. Dividend
5.1 Amount
TRGP has a Yearly Dividend Yield of 2.73%. Purely for dividend investing, there may be better candidates out there.
TRGP's Dividend Yield is comparable with the industry average which is at 6.30.
TRGP's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.73% |
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 47.03% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP47.03%
EPS Next 2Y31.29%
EPS Next 3Y26.38%
150.94
+2.27 (+1.53%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners93.16%
Inst Owner Change0.11%
Ins Owners1.39%
Ins Owner Change-1.41%
Market Cap32.48B
Analysts84.83
Price Target207.43 (37.43%)
Short Float %1.9%
Short Ratio2.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.73% |
Yearly Dividend2.8
Dividend Growth(5Y)-7.6%
DP47.03%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.11%
Min EPS beat(2)-54.87%
Max EPS beat(2)50.64%
EPS beat(4)2
Avg EPS beat(4)-4.88%
Min EPS beat(4)-54.87%
Max EPS beat(4)50.64%
EPS beat(8)3
Avg EPS beat(8)-7.66%
EPS beat(12)4
Avg EPS beat(12)-14.81%
EPS beat(16)6
Avg EPS beat(16)-15.21%
Revenue beat(2)0
Avg Revenue beat(2)-11.2%
Min Revenue beat(2)-13.68%
Max Revenue beat(2)-8.72%
Revenue beat(4)0
Avg Revenue beat(4)-8.22%
Min Revenue beat(4)-13.68%
Max Revenue beat(4)-3.5%
Revenue beat(8)2
Avg Revenue beat(8)-7.46%
Revenue beat(12)2
Avg Revenue beat(12)-12.35%
Revenue beat(16)5
Avg Revenue beat(16)-6.31%
PT rev (1m)-0.93%
PT rev (3m)-0.39%
EPS NQ rev (1m)2.74%
EPS NQ rev (3m)3.11%
EPS NY rev (1m)1.94%
EPS NY rev (3m)6.34%
Revenue NQ rev (1m)1.53%
Revenue NQ rev (3m)-5.8%
Revenue NY rev (1m)-1.13%
Revenue NY rev (3m)-9.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.62 | ||
| Fwd PE | 15.22 | ||
| P/S | 1.9 | ||
| P/FCF | 75.98 | ||
| P/OCF | 8.82 | ||
| P/B | 12.55 | ||
| P/tB | 41.98 | ||
| EV/EBITDA | 10.88 |
EPS(TTM)6.98
EY4.62%
EPS(NY)9.92
Fwd EY6.57%
FCF(TTM)1.99
FCFY1.32%
OCF(TTM)17.11
OCFY11.33%
SpS79.37
BVpS12.03
TBVpS3.6
PEG (NY)0.5
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.48% | ||
| ROE | 58.9% | ||
| ROCE | 14.78% | ||
| ROIC | 11.93% | ||
| ROICexc | 12% | ||
| ROICexgc | 13.18% | ||
| OM | 17.6% | ||
| PM (TTM) | 8.93% | ||
| GM | 35.7% | ||
| FCFM | 2.5% |
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-Score7
Asset Turnover0.73
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.21 | ||
| Debt/FCF | 39.42 | ||
| Debt/EBITDA | 3.59 | ||
| Cap/Depr | 220.58% | ||
| Cap/Sales | 19.05% | ||
| Interest Coverage | 4.31 | ||
| Cash Conversion | 82.16% | ||
| Profit Quality | 28.05% | ||
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 2.12 |
F-Score7
WACC8%
ROIC/WACC1.49
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)46.21%
EPS 3Y45.97%
EPS 5YN/A
EPS Q2Q%115.79%
EPS Next Y43.48%
EPS Next 2Y31.29%
EPS Next 3Y26.38%
EPS Next 5Y16.08%
Revenue 1Y (TTM)5.03%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%19.6%
Revenue Next Year11.71%
Revenue Next 2Y16.28%
Revenue Next 3Y11.76%
Revenue Next 5Y5.98%
EBIT growth 1Y24.87%
EBIT growth 3Y26.58%
EBIT growth 5Y39.68%
EBIT Next Year73.77%
EBIT Next 3Y27.6%
EBIT Next 5Y18.06%
FCF growth 1Y-49.92%
FCF growth 3Y-27.54%
FCF growth 5YN/A
OCF growth 1Y29.46%
OCF growth 3Y16.59%
OCF growth 5Y21.3%