TARGA RESOURCES CORP (TRGP) Stock Fundamental Analysis
USA - NYSE:TRGP - US87612G1013 - Common Stock
162.69 USD
+8.12 (+5.25%)
162.69 USD
0 (0%)
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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year TRGP was profitable.
In the past year TRGP had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: TRGP reported negative net income in multiple years.
In the past 5 years TRGP always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 6.48%, TRGP is in the better half of the industry, outperforming 72.38% of the companies in the same industry.
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 better Return On Invested Capital (11.93%) than 85.71% 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 21.78%.
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
TRGP's Profit Margin of 8.93% is in line compared to the rest of the industry. TRGP outperforms 53.33% of its industry peers.
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 has a Gross Margin (35.70%) which is in line with 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.
Compared to 1 year ago, TRGP has less shares outstanding
TRGP has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TRGP has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.20 indicates that TRGP is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.20, TRGP is doing good in the industry, outperforming 70.48% 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.
The Debt to FCF ratio of TRGP (39.42) is comparable to the rest of the industry.
TRGP has a Debt/Equity ratio of 6.21. This is a high value indicating a heavy dependency on external financing.
TRGP has a worse Debt to Equity ratio (6.21) than 90.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.21 | ||
| Debt/FCF | 39.42 | ||
| Altman-Z | 2.2 |
ROIC/WACC1.48
WACC8.07%
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.
The Current ratio of TRGP (0.69) is worse than 76.19% of its industry peers.
TRGP has a Quick 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.
The Quick ratio of TRGP (0.56) is worse than 80.48% 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 33.99% 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.
Looking at the last year, TRGP shows a small growth in Revenue. The Revenue has grown by 2.00% in the last year.
The Revenue has been growing by 13.57% on average over the past years. This is quite good.
EPS 1Y (TTM)33.99%
EPS 3Y45.97%
EPS 5YN/A
EPS Q2Q%26.07%
Revenue 1Y (TTM)2%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%7.77%
3.2 Future
The Earnings Per Share is expected to grow by 16.08% on average over the next years. This is quite good.
TRGP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.98% yearly.
EPS Next Y46.56%
EPS Next 2Y30.24%
EPS Next 3Y25.42%
EPS Next 5Y16.08%
Revenue Next Year10.84%
Revenue Next 2Y15.41%
Revenue Next 3Y11.28%
Revenue Next 5Y5.98%
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
With a Price/Earnings ratio of 21.87, TRGP is valued on the expensive side.
TRGP's Price/Earnings is on the same level as the industry average.
TRGP is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.13, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 16.67 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 22.35, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.87 | ||
| Fwd PE | 16.67 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TRGP is valued a bit more expensive than 60.00% of the companies in the same industry.
TRGP's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 81.89 | ||
| EV/EBITDA | 11.55 |
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 25.42% in the coming years.
PEG (NY)0.47
PEG (5Y)N/A
EPS Next 2Y30.24%
EPS Next 3Y25.42%
5. Dividend
5.1 Amount
TRGP has a Yearly Dividend Yield of 2.46%.
Compared to an average industry Dividend Yield of 6.83, TRGP has a dividend in line with its industry peers.
TRGP's Dividend Yield is comparable with the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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
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 2Y30.24%
EPS Next 3Y25.42%
162.69
+8.12 (+5.25%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners93.16%
Inst Owner Change-0.33%
Ins Owners1.39%
Ins Owner Change-1.41%
Market Cap35.01B
Revenue(TTM)16.38B
Net Income(TTM)1.52B
Analysts84.83
Price Target207.5 (27.54%)
Short Float %1.77%
Short Ratio2.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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)-0.9%
PT rev (3m)-0.76%
EPS NQ rev (1m)2.22%
EPS NQ rev (3m)2.95%
EPS NY rev (1m)1.49%
EPS NY rev (3m)7.93%
Revenue NQ rev (1m)-0.87%
Revenue NQ rev (3m)-8.53%
Revenue NY rev (1m)0.58%
Revenue NY rev (3m)-9.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.87 | ||
| Fwd PE | 16.67 | ||
| P/S | 2.05 | ||
| P/FCF | 81.89 | ||
| P/OCF | 9.51 | ||
| P/B | 13.53 | ||
| P/tB | 45.25 | ||
| EV/EBITDA | 11.55 |
EPS(TTM)7.44
EY4.57%
EPS(NY)9.76
Fwd EY6%
FCF(TTM)1.99
FCFY1.22%
OCF(TTM)17.11
OCFY10.52%
SpS79.37
BVpS12.03
TBVpS3.6
PEG (NY)0.47
PEG (5Y)N/A
Graham Number44.87
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%
ROICexgc growth 3Y10.65%
ROICexgc 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 | 2.2 |
F-Score7
WACC8.07%
ROIC/WACC1.48
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)33.99%
EPS 3Y45.97%
EPS 5YN/A
EPS Q2Q%26.07%
EPS Next Y46.56%
EPS Next 2Y30.24%
EPS Next 3Y25.42%
EPS Next 5Y16.08%
Revenue 1Y (TTM)2%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%7.77%
Revenue Next Year10.84%
Revenue Next 2Y15.41%
Revenue Next 3Y11.28%
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 5Y18.44%
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%
TARGA RESOURCES CORP / TRGP FAQ
Can you provide the ChartMill fundamental rating for TARGA RESOURCES CORP?
ChartMill assigns a fundamental rating of 5 / 10 to TRGP.
What is the valuation status of TARGA RESOURCES CORP (TRGP) stock?
ChartMill assigns a valuation rating of 4 / 10 to TARGA RESOURCES CORP (TRGP). This can be considered as Fairly Valued.
Can you provide the profitability details for TARGA RESOURCES CORP?
TARGA RESOURCES CORP (TRGP) has a profitability rating of 6 / 10.
What is the earnings growth outlook for TARGA RESOURCES CORP?
The Earnings per Share (EPS) of TARGA RESOURCES CORP (TRGP) is expected to grow by 46.56% in the next year.
Is the dividend of TARGA RESOURCES CORP sustainable?
The dividend rating of TARGA RESOURCES CORP (TRGP) is 4 / 10 and the dividend payout ratio is 47.03%.