TARGA RESOURCES CORP (TRGP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TRGP - US87612G1013 - Common Stock
180.74 USD
+0.72 (+0.4%)
180.74 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to TRGP. TRGP was compared to 209 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 decent growth rate and is not valued too expensively.
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.
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
The Return On Assets of TRGP (6.68%) is better than 76.56% of its industry peers.
TRGP has a better Return On Equity (59.68%) than 95.69% of its industry peers.
With an excellent Return On Invested Capital value of 11.84%, TRGP belongs to the best of the industry, outperforming 88.52% of the companies in the same industry.
TRGP had an Average Return On Invested Capital over the past 3 years of 10.47%. This is significantly below the industry average of 20.88%.
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.
Looking at the Operating Margin, with a value of 17.92%, TRGP is in line with its industry, outperforming 52.15% of the companies in the same industry.
TRGP's Operating Margin has improved in the last couple of years.
TRGP's Gross Margin of 36.00% is in line compared to the rest of the industry. TRGP outperforms 45.45% of its industry peers.
TRGP's Gross Margin has improved in the last couple of years.
| 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
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
The number of shares outstanding for TRGP has been reduced compared to 5 years ago.
TRGP has a better debt/assets ratio than last year.
2.2 Solvency
TRGP has an Altman-Z score of 2.31. 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 2.31. This is in the better half of the industry: TRGP outperforms 71.29% of its industry peers.
TRGP has a debt to FCF ratio of 27.12. This is a negative value and a sign of low solvency as TRGP would need 27.12 years to pay back of all of its debts.
The Debt to FCF ratio of TRGP (27.12) is comparable to the rest of the industry.
A Debt/Equity ratio of 6.19 is on the high side and indicates that TRGP has dependencies on debt financing.
With a Debt to Equity ratio value of 6.19, TRGP is not doing good in the industry: 90.43% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.19 | ||
| Debt/FCF | 27.12 | ||
| Altman-Z | 2.31 |
ROIC/WACC1.43
WACC8.3%
2.3 Liquidity
A Current Ratio of 0.77 indicates that TRGP may have some problems paying its short term obligations.
With a Current ratio value of 0.77, TRGP is not doing good in the industry: 69.86% of the companies in the same industry are doing better.
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 71.29% of its industry peers.
| 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.
The Revenue has been growing slightly by 7.17% in the past 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)7.17%
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.
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
With a Price/Earnings ratio of 24.29, TRGP is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of TRGP is on the same level as its industry peers.
TRGP is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.49, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 18.21, the valuation of TRGP can be described as rather expensive.
TRGP's Price/Forward Earnings is on the same level as the industry average.
TRGP's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.69.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.29 | ||
| Fwd PE | 18.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TRGP is valued a bit more expensive than 61.72% 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 | 60.36 | ||
| EV/EBITDA | 12.15 |
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 26.14% in the coming years.
PEG (NY)0.5
PEG (5Y)N/A
EPS Next 2Y31.35%
EPS Next 3Y26.14%
5. Dividend
5.1 Amount
TRGP has a Yearly Dividend Yield of 2.22%.
Compared to an average industry Dividend Yield of 5.71, TRGP has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.31, TRGP has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
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 47.51% 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%
180.74
+0.72 (+0.4%)
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-1.39%
Market Cap38.80B
Revenue(TTM)17.38B
Net Income(TTM)1.62B
Analysts84.83
Price Target209.54 (15.93%)
Short Float %2.19%
Short Ratio3.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
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)0.98%
PT rev (3m)0.1%
EPS NQ rev (1m)2.65%
EPS NQ rev (3m)5.43%
EPS NY rev (1m)1.63%
EPS NY rev (3m)5.83%
Revenue NQ rev (1m)-4.96%
Revenue NQ rev (3m)-5.82%
Revenue NY rev (1m)-6.22%
Revenue NY rev (3m)-12.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.29 | ||
| Fwd PE | 18.21 | ||
| P/S | 2.23 | ||
| P/FCF | 60.36 | ||
| P/OCF | 10.37 | ||
| P/B | 14.33 | ||
| P/tB | 39.84 | ||
| EV/EBITDA | 12.15 |
EPS(TTM)7.44
EY4.12%
EPS(NY)9.93
Fwd EY5.49%
FCF(TTM)2.99
FCFY1.66%
OCF(TTM)17.42
OCFY9.64%
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 | 2.31 |
F-Score7
WACC8.3%
ROIC/WACC1.43
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%.