Today we're going to take a closer look at large-cap Utilities company Energy Transfer LP, whose shares are currently trading at $14.07. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
Energy Transfer LP Is Currently Undervalued:
Energy Transfer LP provides energy-related services. The company belongs to the Utilities sector, which has an average price to earnings (P/E) ratio of 17.53 and an average price to book (P/B) ratio of 1.71. In contrast, Energy Transfer LP has a trailing 12 month P/E ratio of 13.3 and a P/B ratio of 1.64.
Energy Transfer LP's PEG ratio is 1.49, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company Has Lacking Information on Debt Levels:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $54,087 | $54,213 | $38,954 | $67,417 | $89,876 | $78,555 |
| Revenue Growth | n/a | 0.23% | -28.15% | 73.07% | 33.31% | -12.6% |
| Operating Margins | 10% | 13% | 8% | 13% | 9% | 10% |
| Net Margins | 3% | 6% | -2% | 8% | 5% | 5% |
| Net Income (MM) | $1,749 | $3,518 | -$648 | $5,470 | $4,756 | $3,763 |
| Net Interest Expense (MM) | $2,055 | $2,331 | $2,327 | $2,267 | $2,306 | $2,484 |
| Depreciation & Amort. (MM) | $2,859 | $3,147 | $3,678 | $3,817 | $4,164 | $4,287 |
| Earnings Per Share | $1.2 | $1.33 | -$0.24 | $2.0 | $1.54 | $1.19 |
| EPS Growth | n/a | 10.83% | -118.05% | 933.33% | -23.0% | -22.73% |
| Diluted Shares (MM) | 1,461 | 2,638 | 2,696 | 2,740 | 3,097 | 3,168 |
| Free Cash Flow (MM) | $99 | $2,096 | $2,231 | $8,340 | $5,670 | $6,279 |
| Capital Expenditures (MM) | $7,407 | $5,960 | $5,130 | $2,822 | $3,381 | $3,318 |
| Current Ratio | 0.69 | 0.97 | 1.07 | 0.97 | 1.17 | 1.05 |
| Total Debt (MM) | $46,028 | $51,054 | $51,438 | $49,702 | $48,260 | $48,080 |
Energy Transfer LP has decent operating margins with a stable trend, flat EPS growth, and just enough current assets to cover current liabilities, as shown by its current ratio of 1.05. We also note that the company benefits from generally positive cash flows and rapidly growing revenues and decreasing reinvestment in the business.
