company background image
TRGP

Targa ResourcesNYSE:TRGP Stock Report

Market Cap

US$13.0b

7D

4.7%

1Y

244.3%

Updated

20 Oct, 2021

Data

Company Financials +
TRGP fundamental analysis
Snowflake Score
Valuation1/6
Future Growth2/6
Past Performance3/6
Financial Health2/6
Dividends2/6

TRGP Overview

Targa Resources Corp., together with its subsidiary, Targa Resources Partners LP, owns, operates, acquires, and develops a portfolio of midstream energy assets in North America.

Targa Resources Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Targa Resources
Historical stock prices
Current Share PriceUS$56.77
52 Week HighUS$15.21
52 Week LowUS$57.06
Beta2.94
1 Month Change28.67%
3 Month Change32.55%
1 Year Change244.27%
3 Year Change10.23%
5 Year Change21.41%
Change since IPO129.84%

Recent News & Updates

Oct 08

Why We Believe Targa Resources Is Likely To Outperform Over The Next Several Years

Targa Resources is a midstream C-Corp that was an over-levered midstream player in 2020 that has made a sharp positive turn around in 2021 and raised guidance multiple times. Targa positives include growth, Permian exposure, export exposure, NGL exposure, stock buybacks, benefits from rising oil prices, NGL prices, and natural gas prices, and catalysts. A key catalyst: the balance sheet is already at investment grade levels and given likely further improvement, we believe an upgrade to IG is likely within 18 months. Another catalyst: Targa is in a JV development company and a buy-out is likely at 5.5x-6xEBITDA which could unlock an incremental $150mm EBITDA (though we assume less). But here’s more: Valuation is reasonable too at 9.6x 2021E EBITDA vs mid 9s for peers, 11x for ONEOK, and below its average of last 7 years.

Oct 01
Is Targa Resources Corp. (NYSE:TRGP) Trading At A 25% Discount?

Is Targa Resources Corp. (NYSE:TRGP) Trading At A 25% Discount?

How far off is Targa Resources Corp. ( NYSE:TRGP ) from its intrinsic value? Using the most recent financial data...

Sep 10
Does Targa Resources (NYSE:TRGP) Have A Healthy Balance Sheet?

Does Targa Resources (NYSE:TRGP) Have A Healthy Balance Sheet?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...

Sep 08

Targa Resources: Great Finances, Terrible Dividend

Targa Resources operates primarily in the Permian and Bakken regions, which were among the most affected by last year's energy price troubles. The company managed to grow its cash flows despite this, a trend which should continue this year. The company's cash flows are very secure as they are backed by long-term contracts with well-financed customers. The company has a very reasonable debt load and now that it is free cash flow positive, it will likely improve on this. The company can easily afford its dividend, although the yield is incredibly low for a midstream company.

Shareholder Returns

TRGPUS Oil and GasUS Market
7D4.7%3.6%3.8%
1Y244.3%97.5%31.5%

Return vs Industry: TRGP exceeded the US Oil and Gas industry which returned 92.2% over the past year.

Return vs Market: TRGP exceeded the US Market which returned 30.5% over the past year.

Price Volatility

Is TRGP's price volatile compared to industry and market?
TRGP volatility
TRGP Beta2.94
Industry Beta1.74
Market Beta1

Stable Share Price: TRGP is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: TRGP's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20032,372Matt Meloyhttps://www.targaresources.com

Targa Resources Corp., together with its subsidiary, Targa Resources Partners LP, owns, operates, acquires, and develops a portfolio of midstream energy assets in North America. It operates in two segments, Gathering and Processing, and Logistics and Transportation. The company engages in gathering, compressing, treating, processing, transporting, and selling natural gas; storing, fractionating, treating, transporting, and selling natural gas liquids (NGL) and NGL products, including services to liquefied petroleum gas exporters; and gathering, purchasing, storing, terminaling, and selling crude oil.

Targa Resources Fundamentals Summary

How do Targa Resources's earnings and revenue compare to its market cap?
TRGP fundamental statistics
Market CapUS$12.98b
Earnings (TTM)US$194.90m
Revenue (TTM)US$11.74b

66.6x

P/E Ratio

1.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
TRGP income statement (TTM)
RevenueUS$11.74b
Cost of RevenueUS$8.57b
Gross ProfitUS$3.17b
ExpensesUS$2.97b
EarningsUS$194.90m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Nov 04, 2021

Earnings per share (EPS)0.85
Gross Margin27.00%
Net Profit Margin1.66%
Debt/Equity Ratio113.0%

How did TRGP perform over the long term?

See historical performance and comparison

Dividends

0.7%

Current Dividend Yield

47%

Payout Ratio

Does TRGP pay a reliable dividends?

See TRGP dividend history and benchmarks
When do you need to buy TRGP by to receive an upcoming dividend?
Targa Resources dividend dates
Ex Dividend DateOct 28 2021
Dividend Pay DateNov 15 2021
Days until Ex dividend7 days
Days until Dividend pay date25 days

Does TRGP pay a reliable dividends?

See TRGP dividend history and benchmarks

Valuation

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

17.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TRGP ($56.77) is trading below our estimate of fair value ($68.98)

Significantly Below Fair Value: TRGP is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: TRGP is poor value based on its PE Ratio (66.6x) compared to the US Oil and Gas industry average (19.3x).

PE vs Market: TRGP is poor value based on its PE Ratio (66.6x) compared to the US market (18.1x).


Price to Earnings Growth Ratio

PEG Ratio: TRGP is poor value based on its PEG Ratio (3.8x)


Price to Book Ratio

PB vs Industry: TRGP is overvalued based on its PB Ratio (5.9x) compared to the US Oil and Gas industry average (2x).


Future Growth

How is Targa Resources forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

17.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TRGP's forecast earnings growth (17.5% per year) is above the savings rate (2%).

Earnings vs Market: TRGP's earnings (17.5% per year) are forecast to grow faster than the US market (15.1% per year).

High Growth Earnings: TRGP's earnings are forecast to grow, but not significantly.

Revenue vs Market: TRGP's revenue (2.1% per year) is forecast to grow slower than the US market (9.9% per year).

High Growth Revenue: TRGP's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TRGP's Return on Equity is forecast to be low in 3 years time (11.9%).


Past Performance

How has Targa Resources performed over the past 5 years?

-36.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TRGP has high quality earnings.

Growing Profit Margin: TRGP became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: TRGP has become profitable over the past 5 years, growing earnings by -36% per year.

Accelerating Growth: TRGP has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: TRGP has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-18.6%).


Return on Equity

High ROE: TRGP's Return on Equity (11.4%) is considered low.


Financial Health

How is Targa Resources's financial position?


Financial Position Analysis

Short Term Liabilities: TRGP's short term assets ($1.3B) do not cover its short term liabilities ($2.1B).

Long Term Liabilities: TRGP's short term assets ($1.3B) do not cover its long term liabilities ($7.2B).


Debt to Equity History and Analysis

Debt Level: TRGP's debt to equity ratio (113%) is considered high.

Reducing Debt: TRGP's debt to equity ratio has increased from 84.3% to 113% over the past 5 years.

Debt Coverage: TRGP's debt is well covered by operating cash flow (33.2%).

Interest Coverage: TRGP's interest payments on its debt are well covered by EBIT (3.3x coverage).


Balance Sheet


Dividend

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

0.70%

Current Dividend Yield


Upcoming Dividend Payment

TodayOct 21 2021Ex Dividend DateOct 28 2021Dividend Pay DateNov 15 202118 days from Ex DividendBuy in the next 7 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: TRGP's dividend (0.7%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.29%).

High Dividend: TRGP's dividend (0.7%) is low compared to the top 25% of dividend payers in the US market (3.49%).


Stability and Growth of Payments

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

Growing Dividend: TRGP's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.2%), TRGP's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TRGP's dividends in 3 years are forecast to be well covered by earnings (26.5% payout ratio).


Next Steps

Management

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

3.6yrs

Average management tenure


CEO

Matt Meloy (43 yo)

1.58yrs

Tenure

US$12,102,596

Compensation

Mr. Matthew J. Meloy, also known as Matt, is Chief Executive Officer and Director of Targa Resources GP LLC, the General Partner of Targa Resources Partners LP since March 1, 2020. Mr. Meloy has been Chief...


CEO Compensation Analysis

Compensation vs Market: Matt's total compensation ($USD12.10M) is about average for companies of similar size in the US market ($USD11.17M).

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


Leadership Team

Experienced Management: TRGP's management team is considered experienced (3.6 years average tenure).


Board Members

Experienced Board: TRGP's board of directors are considered experienced (9.2 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Targa Resources Corp.'s employee growth, exchange listings and data sources


Key Information

  • Name: Targa Resources Corp.
  • Ticker: TRGP
  • Exchange: NYSE
  • Founded: 2003
  • Industry: Oil and Gas Storage and Transportation
  • Sector: Energy
  • Market Cap: US$12.981b
  • Shares outstanding: 228.66m
  • Website: https://www.targaresources.com

Number of Employees


Location

  • Targa Resources Corp.
  • 811 Louisiana Street
  • Suite 2100
  • Houston
  • Texas
  • 77002
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/10/20 23:23
End of Day Share Price2021/10/20 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.