TARGA RESOURCES CORP (TRGP)
US87612G1013 - Common Stock
Overall TRGP gets a fundamental rating of 4 out of 10. We evaluated TRGP against 204 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.
TRGP had a positive operating cash flow in the past year.
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.
The Return On Equity of TRGP (47.84%) is better than 93.60% of its industry peers.
TRGP's Return On Invested Capital of 11.83% is fine compared to the rest of the industry. TRGP outperforms 71.43% 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 22.54%.
The last Return On Invested Capital (11.83%) for TRGP is above the 3 year average (10.24%), which is a sign of increasing profitability.
| 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 worse Profit Margin (7.59%) than 61.58% of its industry peers.
TRGP has a Operating Margin (16.22%) which is comparable to the rest of the industry.
TRGP's Operating Margin has improved in the last couple of years.
The Gross Margin of TRGP (34.14%) is comparable to the rest of the industry.
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TRGP is creating some value.
The number of shares outstanding for TRGP has been reduced compared to 1 year ago.
TRGP has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TRGP has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.57 indicates that TRGP is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of TRGP (2.57) is better than 68.47% 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 has a worse Debt to FCF ratio (44.46) than 66.01% of its industry peers.
A Debt/Equity ratio of 5.28 is on the high side and indicates that TRGP has dependencies on debt financing.
TRGP has a worse Debt to Equity ratio (5.28) than 93.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.28 | ||
| Debt/FCF | 44.46 | ||
| Altman-Z | 2.57 |
ROIC/WACC1.47
WACC8.06%
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 73.40% 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 Quick ratio of 0.61. This is in the lower half of the industry: TRGP underperforms 77.34% 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 45.22%, which is quite impressive.
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%.
Measured over the past years, TRGP shows a quite strong growth in Revenue. The Revenue has been growing by 8.90% on average per year.
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 17.65% on average over the next years. This is quite good.
The Revenue is expected to grow by 3.83% on average over the next years.
EPS Next Y62.88%
EPS Next 2Y50.5%
EPS Next 3Y36.35%
EPS Next 5Y17.65%
Revenue Next Year10.47%
Revenue Next 2Y15.19%
Revenue Next 3Y8.25%
Revenue Next 5Y3.83%
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
The Price/Earnings ratio is 37.42, which means the current valuation is very expensive for TRGP.
Based on the Price/Earnings ratio, TRGP is valued a bit more expensive than 70.44% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.96. TRGP is valued slightly more expensive when compared to this.
A Price/Forward Earnings ratio of 24.80 indicates a rather expensive valuation of TRGP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TRGP indicates a slightly more expensive valuation: TRGP is more expensive than 66.01% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.82. TRGP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.42 | ||
| Fwd PE | 24.8 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TRGP indicates a slightly more expensive valuation: TRGP is more expensive than 72.91% of the companies listed in the same industry.
66.50% of the companies in the same industry are cheaper than TRGP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 141.26 | ||
| EV/EBITDA | 14.79 |
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's earnings are expected to grow with 36.35% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.6
PEG (5Y)0.23
EPS Next 2Y50.5%
EPS Next 3Y36.35%
5. Dividend
5.1 Amount
TRGP has a Yearly Dividend Yield of 1.57%. Purely for dividend investing, there may be better candidates out there.
TRGP's Dividend Yield is slightly below the industry average, which is at 6.45.
TRGP's Dividend Yield is slightly below the S&P500 average, which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
5.2 History
The dividend of TRGP decreases each year by -14.16%.
TRGP has paid a dividend for at least 10 years, which is a reliable track record.
TRGP has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-14.16%
Div Incr Years2
Div Non Decr Years2
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 2Y50.5%
EPS Next 3Y36.35%
TARGA RESOURCES CORP
NYSE:TRGP (11/21/2024, 8:04:00 PM)
After market: 207.69 0 (0%)207.69
+4.85 (+2.39%)
Chartmill FA Rating
GICS SectorEnergy
GICS IndustryGroupEnergy
GICS IndustryOil, Gas & Consumable Fuels
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap45.29B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.57% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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EPS beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.42 | ||
| Fwd PE | 24.8 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.6
PEG (5Y)0.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.62% | ||
| ROE | 47.84% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 16.22% | ||
| PM (TTM) | 7.59% | ||
| GM | 34.14% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.28 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.77 | ||
| Quick Ratio | 0.61 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)45.22%
EPS 3Y4.31%
EPS 5Y
EPS Q2Q%
EPS Next Y62.88%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-0.98%
Revenue growth 3Y24.81%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y