TARGA RESOURCES CORP (TRGP) Stock Fundamental Analysis
NYSE:TRGP - New York Stock Exchange, Inc. - US87612G1013 - Common Stock
We assign a fundamental rating of 4 out of 10 to TRGP. TRGP was compared to 210 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 is valied quite expensively at the moment, while it does show a decent 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.
Each year in the past 5 years TRGP had a positive operating cash flow.
1.2 Ratios
TRGP's Return On Assets of 5.62% is in line compared to the rest of the industry. TRGP outperforms 53.40% of its industry peers.
Looking at the Return On Equity, with a value of 47.84%, TRGP belongs to the top of the industry, outperforming 93.69% of the companies in the same industry.
TRGP's Return On Invested Capital of 11.83% is fine compared to the rest of the industry. TRGP outperforms 74.27% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TRGP is significantly below the industry average of 28.71%.
The 3 year average ROIC (10.24%) for TRGP is below the current ROIC(11.83%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.62% | ||
| ROE | 47.84% | ||
| ROIC | 11.83% |
ROA(3y)2.83%
ROA(5y)-0.78%
ROE(3y)21.1%
ROE(5y)-0.03%
ROIC(3y)10.24%
ROIC(5y)8.2%
1.3 Margins
TRGP has a Profit Margin (7.59%) which is comparable to the rest of the industry.
TRGP's Operating Margin of 16.22% is in line compared to the rest of the industry. TRGP outperforms 47.09% of its industry peers.
In the last couple of years the Operating Margin of TRGP has grown nicely.
With a Gross Margin value of 34.14%, TRGP perfoms like the industry average, outperforming 42.72% of the companies in the same industry.
In the last couple of years the Gross Margin of TRGP has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.22% | ||
| PM (TTM) | 7.59% | ||
| GM | 34.14% |
OM growth 3Y2.53%
OM growth 5Y30.79%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.26%
GM growth 5Y9.37%
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.
The number of shares outstanding for TRGP has been reduced compared to 1 year ago.
Compared to 5 years ago, TRGP has less shares outstanding
Compared to 1 year ago, TRGP has a worse debt to assets ratio.
2.2 Solvency
TRGP has an Altman-Z score of 2.64. 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 better Altman-Z score (2.64) than 69.90% of its industry peers.
TRGP has a debt to FCF ratio of 44.46. This is a negative value and a sign of low solvency as TRGP would need 44.46 years to pay back of all of its debts.
TRGP's Debt to FCF ratio of 44.46 is on the low side compared to the rest of the industry. TRGP is outperformed by 65.05% of its industry peers.
TRGP has a Debt/Equity ratio of 5.28. This is a high value indicating a heavy dependency on external financing.
TRGP has a Debt to Equity ratio of 5.28. This is amonst the worse of the industry: TRGP underperforms 93.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.28 | ||
| Debt/FCF | 44.46 | ||
| Altman-Z | 2.64 |
ROIC/WACC1.41
WACC8.39%
2.3 Liquidity
A Current Ratio of 0.77 indicates that TRGP may have some problems paying its short term obligations.
TRGP has a worse Current ratio (0.77) than 73.30% of its industry peers.
A Quick Ratio of 0.61 indicates that TRGP may have some problems paying its short term obligations.
TRGP has a worse Quick ratio (0.61) than 77.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.61 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 45.22% over the past year.
TRGP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 161.90% yearly.
The Revenue has decreased by -0.98% in the past year.
TRGP shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.90% yearly.
EPS 1Y (TTM)45.22%
EPS 3Y4.31%
EPS 5Y161.9%
EPS Q2Q%79.9%
Revenue 1Y (TTM)-0.98%
Revenue growth 3Y24.81%
Revenue growth 5Y8.9%
Sales Q2Q%-1.15%
3.2 Future
TRGP is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.26% yearly.
Based on estimates for the next years, TRGP will show a small growth in Revenue. The Revenue will grow by 3.87% on average per year.
EPS Next Y65.92%
EPS Next 2Y46.21%
EPS Next 3Y35.47%
EPS Next 5Y22.26%
Revenue Next Year10.79%
Revenue Next 2Y16.77%
Revenue Next 3Y10.63%
Revenue Next 5Y3.87%
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 38.07 indicates a quite expensive valuation of TRGP.
69.90% of the companies in the same industry are cheaper than TRGP, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TRGP to the average of the S&P500 Index (28.19), we can say TRGP is valued slightly more expensively.
Based on the Price/Forward Earnings ratio of 26.73, the valuation of TRGP can be described as expensive.
Based on the Price/Forward Earnings ratio, TRGP is valued a bit more expensive than the industry average as 67.96% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.37, TRGP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.07 | ||
| Fwd PE | 26.73 |
4.2 Price Multiples
71.36% of the companies in the same industry are cheaper than TRGP, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TRGP indicates a slightly more expensive valuation: TRGP is more expensive than 64.56% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 143.7 | ||
| EV/EBITDA | 15.31 |
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.
A more expensive valuation may be justified as TRGP's earnings are expected to grow with 35.47% in the coming years.
PEG (NY)0.58
PEG (5Y)0.24
EPS Next 2Y46.21%
EPS Next 3Y35.47%
5. Dividend
5.1 Amount
TRGP has a Yearly Dividend Yield of 1.41%.
Compared to an average industry Dividend Yield of 6.39, TRGP is paying slightly less dividend.
TRGP's Dividend Yield is slightly below the S&P500 average, which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
5.2 History
The dividend of TRGP decreases each year by -14.16%.
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)-14.16%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
TRGP pays out 45.73% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP45.73%
EPS Next 2Y46.21%
EPS Next 3Y35.47%
TARGA RESOURCES CORP
NYSE:TRGP (1/22/2025, 5:05:00 PM)
After market: 211.27 0 (0%)211.27
-5.95 (-2.74%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners92.56%
Inst Owner Change-0.22%
Ins Owners1.48%
Ins Owner Change-4.44%
Market Cap46.07B
Analysts83.57
Price Target207.35 (-1.86%)
Short Float %2.14%
Short Ratio2.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.41% |
Yearly Dividend1.91
Dividend Growth(5Y)-14.16%
DP45.73%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.33%
Min EPS beat(2)2.65%
Max EPS beat(2)10.02%
EPS beat(4)2
Avg EPS beat(4)-2.79%
Min EPS beat(4)-15.84%
Max EPS beat(4)10.02%
EPS beat(8)3
Avg EPS beat(8)-14.63%
EPS beat(12)4
Avg EPS beat(12)-19.66%
EPS beat(16)6
Avg EPS beat(16)-9.84%
Revenue beat(2)0
Avg Revenue beat(2)-14.46%
Min Revenue beat(2)-21.94%
Max Revenue beat(2)-6.98%
Revenue beat(4)2
Avg Revenue beat(4)-4.21%
Min Revenue beat(4)-21.94%
Max Revenue beat(4)7.96%
Revenue beat(8)2
Avg Revenue beat(8)-12.35%
Revenue beat(12)4
Avg Revenue beat(12)-8.4%
Revenue beat(16)8
Avg Revenue beat(16)-0.26%
PT rev (1m)1.93%
PT rev (3m)33.28%
EPS NQ rev (1m)0%
EPS NQ rev (3m)21.44%
EPS NY rev (1m)0%
EPS NY rev (3m)6.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-8.83%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-3.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 38.07 | ||
| Fwd PE | 26.73 | ||
| P/S | 2.84 | ||
| P/FCF | 143.7 | ||
| P/OCF | 14.05 | ||
| P/B | 17.9 | ||
| P/tB | 91.55 | ||
| EV/EBITDA | 15.31 |
EPS(TTM)5.55
EY2.63%
EPS(NY)7.9
Fwd EY3.74%
FCF(TTM)1.47
FCFY0.7%
OCF(TTM)15.04
OCFY7.12%
SpS74.36
BVpS11.8
TBVpS2.31
PEG (NY)0.58
PEG (5Y)0.24
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.62% | ||
| ROE | 47.84% | ||
| ROCE | 13.64% | ||
| ROIC | 11.83% | ||
| ROICexc | 11.91% | ||
| ROICexgc | 13.35% | ||
| OM | 16.22% | ||
| PM (TTM) | 7.59% | ||
| GM | 34.14% | ||
| FCFM | 1.98% |
ROA(3y)2.83%
ROA(5y)-0.78%
ROE(3y)21.1%
ROE(5y)-0.03%
ROIC(3y)10.24%
ROIC(5y)8.2%
ROICexc(3y)10.35%
ROICexc(5y)8.31%
ROICexgc(3y)11.95%
ROICexgc(5y)9.51%
ROCE(3y)11.81%
ROCE(5y)9.46%
ROICexcg growth 3Y19.21%
ROICexcg growth 5Y35.27%
ROICexc growth 3Y17.79%
ROICexc growth 5Y35.62%
OM growth 3Y2.53%
OM growth 5Y30.79%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-4.26%
GM growth 5Y9.37%
F-Score6
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.28 | ||
| Debt/FCF | 44.46 | ||
| Debt/EBITDA | 3.39 | ||
| Cap/Depr | 213.5% | ||
| Cap/Sales | 18.25% | ||
| Interest Coverage | 3.56 | ||
| Cash Conversion | 81.66% | ||
| Profit Quality | 26.04% | ||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.61 | ||
| Altman-Z | 2.64 |
F-Score6
WACC8.39%
ROIC/WACC1.41
Cap/Depr(3y)125.96%
Cap/Depr(5y)156.82%
Cap/Sales(3y)8.4%
Cap/Sales(5y)13.98%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)45.22%
EPS 3Y4.31%
EPS 5Y161.9%
EPS Q2Q%79.9%
EPS Next Y65.92%
EPS Next 2Y46.21%
EPS Next 3Y35.47%
EPS Next 5Y22.26%
Revenue 1Y (TTM)-0.98%
Revenue growth 3Y24.81%
Revenue growth 5Y8.9%
Sales Q2Q%-1.15%
Revenue Next Year10.79%
Revenue Next 2Y16.77%
Revenue Next 3Y10.63%
Revenue Next 5Y3.87%
EBIT growth 1Y3.45%
EBIT growth 3Y27.98%
EBIT growth 5Y42.43%
EBIT Next Year64.51%
EBIT Next 3Y26.39%
EBIT Next 5Y16.89%
FCF growth 1Y-72%
FCF growth 3Y1.38%
FCF growth 5YN/A
OCF growth 1Y39.71%
OCF growth 3Y22.56%
OCF growth 5Y22.93%