TSX:KEY

Stock Analysis Report

Executive Summary

Keyera Corp. engages in the transportation, storage, and marketing of natural gas liquids (NGLs) and iso-octane in Canada and the United States.

Rewards

Trading at 69.9% below its fair value

Revenue is forecast to grow 4.97% per year

Earnings grew by 10.1% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -5.7% per year for the next 3 years

Has a high level of debt

Dividend of 15.75% is not well covered by earnings

Highly volatile share price over past 3 months

+ 1 more risk


Snowflake Analysis

Good value with proven track record and pays a dividend.


Similar Companies

Share Price & News

How has Keyera's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: KEY's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-12.5%

KEY

2.8%

CA Oil and Gas

4.5%

CA Market


1 Year Return

-62.6%

KEY

-44.8%

CA Oil and Gas

-24.5%

CA Market

Return vs Industry: KEY underperformed the Canadian Oil and Gas industry which returned -46.7% over the past year.

Return vs Market: KEY underperformed the Canadian Market which returned -26% over the past year.


Shareholder returns

KEYIndustryMarket
7 Day-12.5%2.8%4.5%
30 Day-63.6%-37.8%-20.1%
90 Day-65.6%-44.8%-24.9%
1 Year-60.1%-62.6%-42.0%-44.8%-22.0%-24.5%
3 Year-64.8%-70.1%-46.4%-52.6%-14.2%-22.2%
5 Year-67.1%-74.1%-48.0%-56.8%-1.9%-16.5%

Price Volatility Vs. Market

How volatile is Keyera's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Keyera undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KEY (CA$12.19) is trading below our estimate of fair value (CA$40.52)

Significantly Below Fair Value: KEY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: KEY is good value based on its PE Ratio (5.9x) compared to the Oil and Gas industry average (6x).

PE vs Market: KEY is good value based on its PE Ratio (5.9x) compared to the Canadian market (10.6x).


Price to Earnings Growth Ratio

PEG Ratio: KEY's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: KEY is overvalued based on its PB Ratio (0.9x) compared to the CA Oil and Gas industry average (0.4x).


Next Steps

Future Growth

How is Keyera forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

-5.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KEY's earnings are forecast to decline over the next 3 years (-5.7% per year).

Earnings vs Market: KEY's earnings are forecast to decline over the next 3 years (-5.7% per year).

High Growth Earnings: KEY's earnings are forecast to decline over the next 3 years.

Revenue vs Market: KEY's revenue (5% per year) is forecast to grow faster than the Canadian market (3.9% per year).

High Growth Revenue: KEY's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KEY's Return on Equity is forecast to be low in 3 years time (12.7%).


Next Steps

Past Performance

How has Keyera performed over the past 5 years?

18.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KEY has high quality earnings.

Growing Profit Margin: KEY's current net profit margins (12.3%) are higher than last year (9%).


Past Earnings Growth Analysis

Earnings Trend: KEY's earnings have grown by 18.9% per year over the past 5 years.

Accelerating Growth: KEY's earnings growth over the past year (10.1%) is below its 5-year average (18.9% per year).

Earnings vs Industry: KEY earnings growth over the past year (10.1%) exceeded the Oil and Gas industry -2.5%.


Return on Equity

High ROE: KEY's Return on Equity (14.5%) is considered low.


Next Steps

Financial Health

How is Keyera's financial position?


Financial Position Analysis

Short Term Liabilities: KEY's short term assets (CA$656.3M) do not cover its short term liabilities (CA$817.0M).

Long Term Liabilities: KEY's short term assets (CA$656.3M) do not cover its long term liabilities (CA$3.6B).


Debt to Equity History and Analysis

Debt Level: KEY's debt to equity ratio (90.8%) is considered high.

Reducing Debt: KEY's debt to equity ratio has reduced from 98.1% to 90.8% over the past 5 years.

Debt Coverage: KEY's debt is well covered by operating cash flow (32%).

Interest Coverage: KEY's interest payments on its debt are well covered by EBIT (6x coverage).


Balance Sheet

Inventory Level: KEY has a high level of physical assets or inventory.

Debt Coverage by Assets: KEY's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Keyera's current dividend yield, its reliability and sustainability?

16.38%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KEY's dividend (15.75%) is higher than the bottom 25% of dividend payers in the Canadian market (2.73%).

High Dividend: KEY's dividend (15.75%) is in the top 25% of dividend payers in the Canadian market (8.76%)


Stability and Growth of Payments

Stable Dividend: KEY's dividend payments have been volatile in the past 10 years.

Growing Dividend: KEY's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (89.3%), KEY's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KEY's dividends in 3 years are not forecast to be well covered by earnings (121.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure


CEO

David Smith (61yo)

5.17s

Tenure

CA$3,865,644

Compensation

Mr. David G. Smith has been the Chief Executive Officer of Keyera Corp. since January 1, 2015 and served as its President since January 1, 2015 until March 01, 2020 . Mr. Smith served as the President and  ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD2.75M) is about average for companies of similar size in the Canadian market ($USD2.50M).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
David Smith
CEO & Director5.17yrsCA$3.87m0.29% CA$7.3m
C. Setoguchi
President & Chief Commercial Officerno dataCA$1.67m0.093% CA$2.4m
Steven Kroeker
Senior VP & CFO7.25yrsCA$1.64m0.052% CA$1.3m
Bradley Lock
Senior VP & COO1.25yrsCA$1.67m0.087% CA$2.2m
Lavonne Zdunich
Director of Investor Relationsno datano datano data
Nancy Brennan
Senior VP0.67yrno datano data
K. Urquhart
Vice President of Marketing1.25yrsCA$259.69k0.0043% CA$110.1k
Richard Koshman
Vice President of Corporate Development & Strategic Planning1.25yrsno data0.0039% CA$99.6k
Dion Kostiuk
Senior VP of Human Resources & Corporate Services7yrsno data0.0088% CA$226.4k
Bradley Slessor
Vice Presidentno datano data0.00019% CA$4.9k

1.3yrs

Average Tenure

Experienced Management: KEY's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
David Smith
CEO & Director5.17yrsCA$3.87m0.29% CA$7.3m
John Goertzen
Independent Director0.58yrno data0.0058% CA$147.8k
Douglas Haughey
Independent Lead Director5.17yrsCA$215.00k0.0051% CA$130.6k
Michael Norris
Independent Director6.83yrsCA$202.50k0.0036% CA$90.9k
Thomas O'Connor
Independent Director6.17yrsCA$172.50k0.0039% CA$99.6k
Charlene Ripley
Independent Director2.67yrsCA$165.00kno data
Donald Nelson
Independent Director11.83yrsCA$195.00k0.038% CA$978.9k
James Bertram
Independent Chairman of the Board5.17yrsCA$265.00k0.37% CA$9.6m
Janet Woodruff
Independent Director4.67yrsCA$165.00k0.00094% CA$24.1k
Gianna Manes
Independent Director2.83yrsCA$165.00kno data

5.2yrs

Average Tenure

62yo

Average Age

Experienced Board: KEY's board of directors are considered experienced (5.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: KEY insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.3%.


Top Shareholders

Company Information

Keyera Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Keyera Corp.
  • Ticker: KEY
  • Exchange: TSX
  • Founded: 1998
  • Industry: Oil and Gas Storage and Transportation
  • Sector: Energy
  • Market Cap: CA$2.561b
  • Shares outstanding: 218.54m
  • Website: https://www.keyera.com

Number of Employees


Location

  • Keyera Corp.
  • Sun Life Plaza West Tower
  • Suite 200
  • Calgary
  • Alberta
  • T2P 3N4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KEYTSX (The Toronto Stock Exchange)YesCommon SharesCACADMay 2003
KEYU.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMay 2003
K2YDB (Deutsche Boerse AG)YesCommon SharesDEEURMay 2003

Biography

Keyera Corp. engages in the transportation, storage, and marketing of natural gas liquids (NGLs) and iso-octane in Canada and the United States. The company’s Gathering and Processing business units operates a network of approximately 4,000 kilometers of pipelines and 17 natural gas processing plants located in the natural gas production areas primarily on the western side of the Western Canada Sedimentary Basin. This unit also provides natural gas gathering and processing, including liquids extraction services to customers. Its Liquids business unit is involved in the marketing of NGLs, such as propane, butane, condensate, sulphur, and iso-octane, as well as various crude oil midstream activities, as well as liquids blending. This units also provides fractionation, storage, transportation, and terminalling services for NGLs and crude oil; and processing services related to iso-octane through a network of facilities that include underground NGL storage caverns, NGL fractionation facilities, and NGL and crude oil pipelines, as well as rail and truck terminals and the Alberta EnviroFuels facility. It also produces iso-octane. The company was formerly known as Keyera Facilities Income Fund and changed its name to Keyera Corp. in January 2011. Keyera Corp. was founded in 1998 and is headquartered in Calgary, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 03:02
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.