DT Midstream, Inc. (NYSE: DTM)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0001842022
Market Cap 12.88 Bn
P/B 3.24
P/E 34.63
P/S 14.32
ROIC (Qtr) 5.42
Div Yield % 2.52
Rev 1y % (Qtr) 26.61
Total Debt (Qtr) 3.38 Bn
Debt/Equity (Qtr) 0.72
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About

Investment thesis

Bull case

  • Healthy cash reserves of 98M provide 5.76x coverage of short-term debt 17M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 858M provides strong 34.32x coverage of stock compensation 25M, indicating sustainable incentive practices.
  • Tangible assets of 7.40B provide exceptional 41.36x coverage of deferred revenue 179M, showing strong service capability backing.
  • Operating cash flow of 858M provides exceptional 66x coverage of minority interest expenses 13M, showing strong core operations.
  • Operating cash flow of 858M provides strong 4.79x coverage of deferred revenue 179M, indicating service delivery capability.

Bear case

  • Operating cash flow of 858M barely covers its investment activities of (1.54B), with a coverage ratio of -0.56, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 858M provides thin coverage of dividend payments of (312M) with a -2.75 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 98M provide limited coverage of acquisition spending of (1.19B), which is -0.08x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 706M show weak coverage of depreciation charges of 262M, with a 2.69 ratio indicating high capital intensity and potential reinvestment needs.
  • Tax assets of 8M provide limited offset against tax liabilities of 1.26B, which is 0.01x, indicating potential future cash flow pressure from tax obligations.

Peer comparison

Companies in the Oil & Gas Midstream
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ENB Enbridge Inc 112.63 Bn 21.82 2.37 76.66 Bn
2 EPD Enterprise Products Partners L.P. 81.14 Bn 17.33 2.56 33.58 Bn
3 TRP Tc Energy Corp 64.68 Bn 26.06 5.82 43.86 Bn
4 MPLX Mplx Lp 58.19 Bn 14.78 4.97 25.92 Bn
5 KMI Kinder Morgan, Inc. 56.67 Bn 46.57 3.70 32.00 Bn
6 WMB Williams Companies, Inc. 54.06 Bn -94.68 7.35 27.99 Bn
7 LNG Cheniere Energy, Inc. 49.66 Bn -50.93 183.24 25.19 Bn
8 TRGP Targa Resources Corp. 48.94 Bn 0.00 10.77 17.43 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.55 3.63
EV to Cash from Ops. EV/CFO 22.93 38.33
EV to Debt EV to Debt 4.63 -74.71
EV to EBIT EV/EBIT 26.41 18.29
EV to EBITDA EV/EBITDA 23.73 7.00
EV to Free Cash Flow [EV/FCF] EV/FCF 33.63 63.00
EV to Market Cap EV to Market Cap 1.21 2.28
EV to Revenue EV/Rev 17.37 9.80
Price to Book Value [P/B] P/B 3.24 51.38
Price to Earnings [P/E] P/E 34.63 69.14
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.29 -3.69
Dividend Payout Ratio % Div Payout % (Qtr) 80.20 71.20
Dividend per Basic Share Div per Share (Qtr) 3.20 1.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 68.73 33.21
Interest Coverage Int. cover (Qtr) 4.53 5.29
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 6.10 -6.96
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 27.27 16,425.73
Dividend Growth (1y) % Div 1y % (Qtr) 9.97 -2.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -2.01 -0.02
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 16.02 -3.25
EBIT Growth (1y) % EBIT 1y % (Qtr) 7.95 -7.01
EBT Growth (1y) % EBT 1y % (Qtr) 10.44 -231.64
EPS Growth (1y) % EPS 1y % (Qtr) -3.86 -42.37
FCF Growth (1y) % FCF 1y % (Qtr) 22.86 -2.78
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 16.26 1.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.12 0.77
Cash Payout Ratio Cash Payout (Qtr) 0.25 0.21
Cash Ratio Cash Ratio (Qtr) 0.28 0.91
Current Ratio Curr Ratio (Qtr) 0.92 1.78
Debt to Equity Ratio Debt/Equity (Qtr) 0.72 1.13
Interest Cover Ratio Int Coverage (Qtr) 4.53 5.29
Times Interest Earned Times Interest Earned (Qtr) 4.53 5.29
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 82.40 35.43
EBIT Margin % EBIT Margin % (Qtr) 60.09 27.71
EBT Margin % EBT Margin % (Qtr) 46.81 17.46
Gross Margin % Gross Margin % (Qtr) 73.00 48.73
Net Profit Margin % Net Margin % (Qtr) 34.30 15.45