TARGA RESOURCES CORP (TRGP)
US87612G1013 - Common Stock
Taking everything into account, TRGP scores 4 out of 10 in our fundamental rating. TRGP was compared to 205 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. While showing a medium growth rate, TRGP is valued expensive at the moment.
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.
In multiple years TRGP reported negative net income over the last 5 years.
In the past 5 years TRGP always reported a positive cash flow from operatings.
1.2 Ratios
TRGP has a Return On Assets (5.62%) which is comparable to the rest of the industry.
With an excellent Return On Equity value of 47.84%, TRGP belongs to the best of the industry, outperforming 94.12% of the companies in the same industry.
The Return On Invested Capital of TRGP (11.83%) is better than 75.00% of its industry peers.
TRGP had an Average Return On Invested Capital over the past 3 years of 10.24%. This is significantly below the industry average of 29.02%.
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 of 7.59%. This is in the lower half of the industry: TRGP underperforms 60.29% of its industry peers.
The Operating Margin of TRGP (16.22%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of TRGP has grown nicely.
TRGP's Gross Margin of 34.14% is in line compared to the rest of the industry. TRGP outperforms 42.16% of its industry peers.
TRGP's Gross Margin has improved in the last couple of years.
| 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.
TRGP has less shares outstanding than it did 1 year ago.
The number of shares outstanding for TRGP has been reduced compared to 5 years ago.
The debt/assets ratio for TRGP is higher compared to a year ago.
2.2 Solvency
TRGP has an Altman-Z score of 2.36. 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.
With a decent Altman-Z score value of 2.36, TRGP is doing good in the industry, outperforming 69.12% of the companies in the same industry.
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 has a Debt to FCF ratio of 44.46. This is in the lower half of the industry: TRGP underperforms 64.71% 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 93.14% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.28 | ||
| Debt/FCF | 44.46 | ||
| Altman-Z | 2.36 |
ROIC/WACC1.45
WACC8.13%
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 72.06% 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 76.47% 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.
The Earnings Per Share has been growing by 161.90% on average over the past years. This is a very strong growth
TRGP shows a decrease in Revenue. In the last year, the revenue decreased by -0.98%.
The Revenue has been growing by 8.90% on average over the past years. This is quite good.
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
The Earnings Per Share is expected to grow by 22.26% on average over the next years. This is a very strong growth
TRGP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.87% yearly.
EPS Next Y65.92%
EPS Next 2Y46.21%
EPS Next 3Y35.47%
EPS Next 5Y22.26%
Revenue Next Year10.83%
Revenue Next 2Y16.82%
Revenue Next 3Y10.6%
Revenue Next 5Y3.87%
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.
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.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 31.85, which means the current valuation is very expensive for TRGP.
Compared to the rest of the industry, the Price/Earnings ratio of TRGP indicates a slightly more expensive valuation: TRGP is more expensive than 70.59% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.73, TRGP is valued at the same level.
With a Price/Forward Earnings ratio of 22.37, TRGP is valued on the expensive side.
66.18% of the companies in the same industry are cheaper than TRGP, based on the Price/Forward Earnings ratio.
TRGP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.85 | ||
| Fwd PE | 22.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TRGP is valued a bit more expensive than 72.06% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TRGP is valued a bit more expensive than 64.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 120.25 | ||
| EV/EBITDA | 13.12 |
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's earnings are expected to grow with 35.47% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.48
PEG (5Y)0.2
EPS Next 2Y46.21%
EPS Next 3Y35.47%
5. Dividend
5.1 Amount
TRGP has a Yearly Dividend Yield of 1.74%.
TRGP's Dividend Yield is slightly below the industry average, which is at 7.08.
TRGP's Dividend Yield is slightly below the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
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 (12/20/2024, 8:04:00 PM)
After market: 178 +1.21 (+0.68%)176.79
+4.26 (+2.47%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners92.56%
Inst Owner Change-1.45%
Ins Owners1.48%
Ins Owner Change-4.86%
Market Cap38.55B
Analysts84.29
Price Target203.42 (15.06%)
Short Float %1.63%
Short Ratio2.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
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)23.2%
PT rev (3m)32.5%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)21.44%
EPS NY rev (1m)1.86%
EPS NY rev (3m)6.27%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-8.83%
Revenue NY rev (1m)0.32%
Revenue NY rev (3m)-4.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.85 | ||
| Fwd PE | 22.37 | ||
| P/S | 2.38 | ||
| P/FCF | 120.25 | ||
| P/OCF | 11.76 | ||
| P/B | 14.98 | ||
| P/tB | 76.61 | ||
| EV/EBITDA | 13.12 |
EPS(TTM)5.55
EY3.14%
EPS(NY)7.9
Fwd EY4.47%
FCF(TTM)1.47
FCFY0.83%
OCF(TTM)15.04
OCFY8.51%
SpS74.36
BVpS11.8
TBVpS2.31
PEG (NY)0.48
PEG (5Y)0.2
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 | 2.36 |
F-Score6
WACC8.13%
ROIC/WACC1.45
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 Year10.83%
Revenue Next 2Y16.82%
Revenue Next 3Y10.6%
Revenue Next 5Y3.87%
EBIT growth 1Y3.45%
EBIT growth 3Y27.98%
EBIT growth 5Y42.43%
EBIT Next Year64.11%
EBIT Next 3Y26.3%
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%