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TARGA RESOURCES CORP (TRGP) Stock Fundamental Analysis

NYSE:TRGP - New York Stock Exchange, Inc. - US87612G1013 - Common Stock - Currency: USD

164.92  +2.39 (+1.47%)

After market: 160.622 -4.3 (-2.61%)

Fundamental Rating

5

Taking everything into account, TRGP scores 5 out of 10 in our fundamental rating. TRGP was compared to 210 industry peers in the Oil, Gas & Consumable Fuels industry. TRGP has a medium profitability rating, but doesn't score so well on its financial health evaluation. TRGP is not valued too expensively and it also shows a decent growth rate.


Dividend Valuation Growth Profitability Health

6

1. Profitability

1.1 Basic Checks

TRGP had positive earnings in the past year.
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.
TRGP Yearly Net Income VS EBIT VS OCF VS FCFTRGP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 1B -1B 2B 3B

1.2 Ratios

With a decent Return On Assets value of 5.24%, TRGP is doing good in the industry, outperforming 61.43% of the companies in the same industry.
Looking at the Return On Equity, with a value of 48.76%, TRGP belongs to the top of the industry, outperforming 94.29% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 10.70%, TRGP is in the better half of the industry, outperforming 79.05% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TRGP is significantly below the industry average of 23.80%.
The 3 year average ROIC (10.47%) for TRGP is below the current ROIC(10.70%), indicating increased profibility in the last year.
Industry RankSector 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%
TRGP Yearly ROA, ROE, ROICTRGP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 40 -40

1.3 Margins

The Profit Margin of TRGP (7.30%) is comparable to the rest of the industry.
TRGP has a Operating Margin of 15.87%. This is comparable to the rest of the industry: TRGP outperforms 47.62% of its industry peers.
In the last couple of years the Operating Margin of TRGP has grown nicely.
Looking at the Gross Margin, with a value of 34.42%, TRGP is in line with its industry, outperforming 44.76% of the companies in the same industry.
TRGP's Gross Margin has improved in the last couple of years.
Industry RankSector 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%
TRGP Yearly Profit, Operating, Gross MarginsTRGP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10 -10 20 -20 30

3

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.
Compared to 1 year ago, TRGP has less shares outstanding
TRGP has less shares outstanding than it did 5 years ago.
TRGP has a better debt/assets ratio than last year.
TRGP Yearly Shares OutstandingTRGP Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M
TRGP Yearly Total Debt VS Total AssetsTRGP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B 20B

2.2 Solvency

TRGP has an Altman-Z score of 2.15. 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 (2.15) is better than 70.48% 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.
Looking at the Debt to FCF ratio, with a value of 25.35, TRGP is in line with its industry, outperforming 43.81% of the companies in the same industry.
TRGP has a Debt/Equity ratio of 6.34. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of TRGP (6.34) is worse than 90.00% of its industry peers.
Industry RankSector Rank
Debt/Equity 6.34
Debt/FCF 25.35
Altman-Z 2.15
ROIC/WACC1.19
WACC8.96%
TRGP Yearly LT Debt VS Equity VS FCFTRGP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 5B 10B

2.3 Liquidity

A Current Ratio of 0.65 indicates that TRGP may have some problems paying its short term obligations.
With a Current ratio value of 0.65, TRGP is not doing good in the industry: 79.52% of the companies in the same industry are doing better.
A Quick Ratio of 0.57 indicates that TRGP may have some problems paying its short term obligations.
TRGP has a Quick ratio of 0.57. This is in the lower half of the industry: TRGP underperforms 76.67% of its industry peers.
Industry RankSector Rank
Current Ratio 0.65
Quick Ratio 0.57
TRGP Yearly Current Assets VS Current LiabilitesTRGP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B

5

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 11.40% 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 1.73%.
The Revenue has been growing by 13.57% on average over the past years. This is quite good.
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.
TRGP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.15% yearly.
EPS Next Y34.92%
EPS Next 2Y29.52%
EPS Next 3Y24.94%
EPS Next 5Y16.08%
Revenue Next Year23.99%
Revenue Next 2Y17.02%
Revenue Next 3Y9.8%
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.
TRGP Yearly Revenue VS EstimatesTRGP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 5B 10B 15B 20B
TRGP Yearly EPS VS EstimatesTRGP Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 0 5 -5 10

4

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 30.32, TRGP can be considered very expensive at the moment.
Based on the Price/Earnings ratio, TRGP is valued a bit more expensive than the industry average as 61.43% of the companies are valued more cheaply.
TRGP is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.69, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 17.09, TRGP is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as TRGP.
When comparing the Price/Forward Earnings ratio of TRGP to the average of the S&P500 Index (37.36), we can say TRGP is valued rather cheaply.
Industry RankSector Rank
PE 30.32
Fwd PE 17.09
TRGP Price Earnings VS Forward Price EarningsTRGP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

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 61.43% of the companies listed in the same industry.
TRGP's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 55.94
EV/EBITDA 12.67
TRGP Per share dataTRGP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 20 40 60

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.
A more expensive valuation may be justified as TRGP's earnings are expected to grow with 24.94% in the coming years.
PEG (NY)0.87
PEG (5Y)N/A
EPS Next 2Y29.52%
EPS Next 3Y24.94%

4

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.40%, TRGP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.49, TRGP has a dividend in line with its industry peers.
TRGP's Dividend Yield is comparable with the S&P500 average which is at 2.34.
Industry RankSector Rank
Dividend Yield 2.4%

5.2 History

The dividend of TRGP decreases each year by -7.60%.
TRGP has been paying a dividend for at least 10 years, so it has 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
TRGP Yearly Dividends per shareTRGP Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1 2 3

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 2Y29.52%
EPS Next 3Y24.94%
TRGP Yearly Income VS Free CF VS DividendTRGP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 1B -1B
TRGP Dividend Payout.TRGP Dividend Payout, showing the Payout Ratio.TRGP Dividend Payout.PayoutRetained Earnings

TARGA RESOURCES CORP

NYSE:TRGP (7/23/2025, 5:15:53 PM)

After market: 160.622 -4.3 (-2.61%)

164.92

+2.39 (+1.47%)

Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)05-01 2025-05-01/bmo
Earnings (Next)08-07 2025-08-07/amc
Inst Owners92.75%
Inst Owner Change-0.66%
Ins Owners1.43%
Ins Owner Change-4.63%
Market Cap35.78B
Analysts85.71
Price Target209.09 (26.78%)
Short Float %2.35%
Short Ratio2.58
Dividend
Industry RankSector Rank
Dividend Yield 2.4%
Yearly Dividend2.8
Dividend Growth(5Y)-7.6%
DP55.72%
Div Incr Years3
Div Non Decr Years3
Ex-Date07-31 2025-07-31 (1)
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)0.52%
PT rev (3m)-7.2%
EPS NQ rev (1m)0.53%
EPS NQ rev (3m)0.46%
EPS NY rev (1m)-2.11%
EPS NY rev (3m)-6.47%
Revenue NQ rev (1m)0.6%
Revenue NQ rev (3m)-2.8%
Revenue NY rev (1m)-1.04%
Revenue NY rev (3m)-5.82%
Valuation
Industry RankSector Rank
PE 30.32
Fwd PE 17.09
P/S 2.18
P/FCF 55.94
P/OCF 9.6
P/B 14.59
P/tB 64.39
EV/EBITDA 12.67
EPS(TTM)5.44
EY3.3%
EPS(NY)9.65
Fwd EY5.85%
FCF(TTM)2.95
FCFY1.79%
OCF(TTM)17.18
OCFY10.42%
SpS75.51
BVpS11.3
TBVpS2.56
PEG (NY)0.87
PEG (5Y)N/A
Profitability
Industry RankSector 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 RankSector 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 2.15
F-Score5
WACC8.96%
ROIC/WACC1.19
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 Y34.92%
EPS Next 2Y29.52%
EPS Next 3Y24.94%
EPS Next 5Y16.08%
Revenue 1Y (TTM)1.73%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%-0.02%
Revenue Next Year23.99%
Revenue Next 2Y17.02%
Revenue Next 3Y9.8%
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%