TARGA RESOURCES CORP (TRGP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TRGP - US87612G1013 - Common Stock
182.66 USD
+3.73 (+2.08%)
182.66 USD
0 (0%)
TRGP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 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 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
TRGP has a Return On Assets of 6.68%. This is in the better half of the industry: TRGP outperforms 76.67% of its industry peers.
TRGP has a better Return On Equity (59.68%) than 95.71% of its industry peers.
TRGP has a better Return On Invested Capital (11.84%) than 88.57% of its industry peers.
TRGP had an Average Return On Invested Capital over the past 3 years of 10.47%. This is significantly below the industry average of 21.09%.
The 3 year average ROIC (10.47%) for TRGP is below the current ROIC(11.84%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.68% | ||
| ROE | 59.68% | ||
| ROIC | 11.84% |
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 (9.30%) which is in line with its industry peers.
TRGP has a Operating Margin (17.92%) which is comparable to the rest of the industry.
TRGP's Operating Margin has improved in the last couple of years.
TRGP has a Gross Margin (36.00%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of TRGP has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.92% | ||
| PM (TTM) | 9.3% | ||
| GM | 36% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TRGP is still creating some value.
TRGP has less shares outstanding than it did 1 year ago.
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
TRGP has an Altman-Z score of 2.30. 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 has a Altman-Z score of 2.30. This is in the better half of the industry: TRGP outperforms 73.33% of its industry peers.
The Debt to FCF ratio of TRGP is 27.12, which is on the high side as it means it would take TRGP, 27.12 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 27.12, TRGP is in line with its industry, outperforming 43.33% of the companies in the same industry.
TRGP has a Debt/Equity ratio of 6.19. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 6.19, TRGP is not doing good in the industry: 89.52% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.19 | ||
| Debt/FCF | 27.12 | ||
| Altman-Z | 2.3 |
ROIC/WACC1.44
WACC8.21%
2.3 Liquidity
A Current Ratio of 0.77 indicates that TRGP may have some problems paying its short term obligations.
TRGP has a Current ratio of 0.77. This is in the lower half of the industry: TRGP underperforms 69.05% of its industry peers.
TRGP has a Quick Ratio of 0.77. 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 Quick ratio value of 0.61, TRGP is not doing good in the industry: 70.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.61 |
3. Growth
3.1 Past
TRGP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 33.99%, 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.
TRGP shows a small growth in Revenue. In the last year, the Revenue has grown by 7.17%.
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)7.17%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%7.77%
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 6.18% on average over the next years.
EPS Next Y48.95%
EPS Next 2Y31.35%
EPS Next 3Y26.14%
EPS Next 5Y16.08%
Revenue Next Year3.95%
Revenue Next 2Y16.88%
Revenue Next 3Y12.58%
Revenue Next 5Y6.18%
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
A Price/Earnings ratio of 24.55 indicates a rather expensive valuation of TRGP.
TRGP's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of TRGP to the average of the S&P500 Index (26.61), we can say TRGP is valued inline with the index average.
A Price/Forward Earnings ratio of 18.40 indicates a rather expensive valuation of TRGP.
TRGP's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 24.01. TRGP is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.55 | ||
| Fwd PE | 18.4 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TRGP is valued a bit more expensive than 61.90% of the companies in the same industry.
TRGP's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 61 | ||
| EV/EBITDA | 12.07 |
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 26.14% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.5
PEG (5Y)N/A
EPS Next 2Y31.35%
EPS Next 3Y26.14%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.24%, TRGP has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.95, TRGP has a dividend in line with its industry peers.
TRGP's Dividend Yield is comparable with the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
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 47.51% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP47.51%
EPS Next 2Y31.35%
EPS Next 3Y26.14%
182.66
+3.73 (+2.08%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners94.31%
Inst Owner Change1.63%
Ins Owners1.31%
Ins Owner Change-1.52%
Market Cap39.21B
Revenue(TTM)17.38B
Net Income(TTM)1.62B
Analysts84.83
Price Target212.49 (16.33%)
Short Float %2.24%
Short Ratio2.99
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
Yearly Dividend2.8
Dividend Growth(5Y)-7.6%
DP47.51%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.87%
Min EPS beat(2)3.1%
Max EPS beat(2)50.64%
EPS beat(4)2
Avg EPS beat(4)-6.61%
Min EPS beat(4)-54.87%
Max EPS beat(4)50.64%
EPS beat(8)4
Avg EPS beat(8)-4.7%
EPS beat(12)5
Avg EPS beat(12)-11.96%
EPS beat(16)6
Avg EPS beat(16)-16.4%
Revenue beat(2)0
Avg Revenue beat(2)-12.24%
Min Revenue beat(2)-13.68%
Max Revenue beat(2)-10.8%
Revenue beat(4)0
Avg Revenue beat(4)-9.17%
Min Revenue beat(4)-13.68%
Max Revenue beat(4)-3.5%
Revenue beat(8)2
Avg Revenue beat(8)-6.69%
Revenue beat(12)2
Avg Revenue beat(12)-11.29%
Revenue beat(16)4
Avg Revenue beat(16)-8.59%
PT rev (1m)2.4%
PT rev (3m)1.48%
EPS NQ rev (1m)3.36%
EPS NQ rev (3m)5.12%
EPS NY rev (1m)1.63%
EPS NY rev (3m)5.83%
Revenue NQ rev (1m)-8.51%
Revenue NQ rev (3m)-5.82%
Revenue NY rev (1m)-6.22%
Revenue NY rev (3m)-8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.55 | ||
| Fwd PE | 18.4 | ||
| P/S | 2.26 | ||
| P/FCF | 61 | ||
| P/OCF | 10.48 | ||
| P/B | 14.49 | ||
| P/tB | 40.26 | ||
| EV/EBITDA | 12.07 |
EPS(TTM)7.44
EY4.07%
EPS(NY)9.93
Fwd EY5.43%
FCF(TTM)2.99
FCFY1.64%
OCF(TTM)17.42
OCFY9.54%
SpS80.96
BVpS12.61
TBVpS4.54
PEG (NY)0.5
PEG (5Y)N/A
Graham Number45.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.68% | ||
| ROE | 59.68% | ||
| ROCE | 14.67% | ||
| ROIC | 11.84% | ||
| ROICexc | 11.91% | ||
| ROICexgc | 12.98% | ||
| OM | 17.92% | ||
| PM (TTM) | 9.3% | ||
| GM | 36% | ||
| FCFM | 3.7% |
ROA(3y)4.73%
ROA(5y)0.69%
ROE(3y)37.62%
ROE(5y)11.05%
ROIC(3y)10.47%
ROIC(5y)9.38%
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 Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.19 | ||
| Debt/FCF | 27.12 | ||
| Debt/EBITDA | 3.63 | ||
| Cap/Depr | 206.01% | ||
| Cap/Sales | 17.82% | ||
| Interest Coverage | 4.11 | ||
| Cash Conversion | 80.99% | ||
| Profit Quality | 39.79% | ||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.61 | ||
| Altman-Z | 2.3 |
F-Score7
WACC8.21%
ROIC/WACC1.44
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 Y48.95%
EPS Next 2Y31.35%
EPS Next 3Y26.14%
EPS Next 5Y16.08%
Revenue 1Y (TTM)7.17%
Revenue growth 3Y-1.13%
Revenue growth 5Y13.57%
Sales Q2Q%7.77%
Revenue Next Year3.95%
Revenue Next 2Y16.88%
Revenue Next 3Y12.58%
Revenue Next 5Y6.18%
EBIT growth 1Y18.41%
EBIT growth 3Y26.58%
EBIT growth 5Y39.68%
EBIT Next Year71.32%
EBIT Next 3Y28.72%
EBIT Next 5Y19.05%
FCF growth 1Y6.14%
FCF growth 3Y-27.54%
FCF growth 5YN/A
OCF growth 1Y33.98%
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 48.95% 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 47.51%.