TARGA RESOURCES CORP (TRGP) Stock Fundamental Analysis
USA - NYSE:TRGP - US87612G1013 - Common Stock
166.38 USD
+1.14 (+0.69%)
166.38 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to TRGP. TRGP was compared to 210 industry peers in the Oil, Gas & Consumable Fuels industry. There are concerns on the financial health of TRGP while its profitability can be described as average. TRGP has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year TRGP was profitable.
TRGP had a positive operating cash flow in the past year.
In multiple years TRGP reported negative net income over the last 5 years.
TRGP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TRGP has a Return On Assets of 6.48%. This is in the better half of the industry: TRGP outperforms 69.05% of its industry peers.
TRGP's Return On Equity of 58.90% is amongst the best of the industry. TRGP outperforms 94.76% of its industry peers.
TRGP has a Return On Invested Capital of 11.93%. This is amongst the best in the industry. TRGP outperforms 86.19% 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 21.91%.
The 3 year average ROIC (10.47%) for TRGP is below the current ROIC(11.93%), indicating increased profibility in the last year.
| 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 52.38% of the companies in the same industry.
TRGP has a Operating Margin of 17.60%. This is comparable to the rest of the industry: TRGP outperforms 51.43% of its industry peers.
In the last couple of years the Operating Margin of TRGP has grown nicely.
TRGP has a Gross Margin (35.70%) which is in line with its industry peers.
TRGP's Gross Margin has improved in the last couple of years.
| 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
TRGP has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for TRGP has been reduced compared to a year ago.
2.2 Solvency
TRGP has an Altman-Z score of 2.22. 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.
The Altman-Z score of TRGP (2.22) is better than 71.90% of its industry peers.
The Debt to FCF ratio of TRGP is 39.42, which is on the high side as it means it would take TRGP, 39.42 years of fcf income to pay off all of its debts.
TRGP has a Debt to FCF ratio (39.42) which is in line with its industry peers.
A Debt/Equity ratio of 6.21 is on the high side and indicates that TRGP has dependencies on debt financing.
TRGP has a Debt to Equity ratio of 6.21. This is amonst the worse of the industry: TRGP underperforms 90.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.21 | ||
| Debt/FCF | 39.42 | ||
| Altman-Z | 2.22 |
ROIC/WACC1.41
WACC8.44%
2.3 Liquidity
A Current Ratio of 0.69 indicates that TRGP may have some problems paying its short term obligations.
With a Current ratio value of 0.69, TRGP is not doing good in the industry: 76.67% 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's Quick ratio of 0.56 is on the low side compared to the rest of the industry. TRGP is outperformed by 78.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
TRGP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 46.21%, which is quite impressive.
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 5.03% 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)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
The Earnings Per Share is expected to grow by 16.08% on average over the next years. This is quite good.
Based on estimates for the next years, TRGP will show a small growth in Revenue. The Revenue will grow by 5.89% on average per year.
EPS Next Y40.75%
EPS Next 2Y32.24%
EPS Next 3Y27.22%
EPS Next 5Y16.08%
Revenue Next Year18.29%
Revenue Next 2Y16.79%
Revenue Next 3Y12.03%
Revenue Next 5Y5.89%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
A Price/Earnings ratio of 23.84 indicates a rather expensive valuation of TRGP.
Compared to the rest of the industry, the Price/Earnings ratio of TRGP is on the same level as its industry peers.
TRGP's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.43.
A Price/Forward Earnings ratio of 16.54 indicates a correct valuation of TRGP.
The rest of the industry has a similar Price/Forward Earnings ratio as TRGP.
TRGP is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.87, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.84 | ||
| Fwd PE | 16.54 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TRGP indicates a slightly more expensive valuation: TRGP is more expensive than 60.00% of the companies listed in the same industry.
TRGP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 83.75 | ||
| EV/EBITDA | 11.67 |
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.
The decent profitability rating of TRGP may justify a higher PE ratio.
TRGP's earnings are expected to grow with 27.22% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.58
PEG (5Y)N/A
EPS Next 2Y32.24%
EPS Next 3Y27.22%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.40%, TRGP has a reasonable but not impressive dividend return.
TRGP's Dividend Yield is comparable with the industry average which is at 6.00.
TRGP's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
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
47.03% of the earnings are spent on dividend by TRGP. This is a bit on the high side, but may be sustainable.
DP47.03%
EPS Next 2Y32.24%
EPS Next 3Y27.22%
166.38
+1.14 (+0.69%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners92.5%
Inst Owner Change-1.77%
Ins Owners1.43%
Ins Owner Change-1.45%
Market Cap35.80B
Analysts84.83
Price Target209.34 (25.82%)
Short Float %1.82%
Short Ratio2.56
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.4% |
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)0.12%
PT rev (3m)-3.07%
EPS NQ rev (1m)-0.78%
EPS NQ rev (3m)2.92%
EPS NY rev (1m)4.32%
EPS NY rev (3m)1.24%
Revenue NQ rev (1m)-8.49%
Revenue NQ rev (3m)-7.54%
Revenue NY rev (1m)-3.74%
Revenue NY rev (3m)-7.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.84 | ||
| Fwd PE | 16.54 | ||
| P/S | 2.1 | ||
| P/FCF | 83.75 | ||
| P/OCF | 9.73 | ||
| P/B | 13.83 | ||
| P/tB | 46.28 | ||
| EV/EBITDA | 11.67 |
EPS(TTM)6.98
EY4.2%
EPS(NY)10.06
Fwd EY6.05%
FCF(TTM)1.99
FCFY1.19%
OCF(TTM)17.11
OCFY10.28%
SpS79.37
BVpS12.03
TBVpS3.6
PEG (NY)0.58
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 | 2.22 |
F-Score7
WACC8.44%
ROIC/WACC1.41
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 Y40.75%
EPS Next 2Y32.24%
EPS Next 3Y27.22%
EPS Next 5Y16.08%
Revenue 1Y (TTM)5.03%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%19.6%
Revenue Next Year18.29%
Revenue Next 2Y16.79%
Revenue Next 3Y12.03%
Revenue Next 5Y5.89%
EBIT growth 1Y24.87%
EBIT growth 3Y26.58%
EBIT growth 5Y39.68%
EBIT Next Year73.59%
EBIT Next 3Y27.5%
EBIT Next 5Y18.22%
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%