Kinetik Holdings Inc. (NYSE: KNTK)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0001692787
Market Cap 5.76 Bn
P/B -3.25
P/E 89.51
P/S 3.35
ROIC (Qtr) 4.74
Div Yield % 10.63
Rev 1y % (Qtr) 17.06
Total Debt (Qtr) 4.22 Bn
Debt/Equity (Qtr) -2.38

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 638.02M provides 4.86x coverage of SG&A expenses 131.24M, showing efficient operational cost management.
  • Tangible assets of 6.61B provide exceptional 200.19x coverage of deferred revenue 33.03M, showing strong service capability backing.
  • Operating cash flow of 638.02M provides strong 19.32x coverage of deferred revenue 33.03M, indicating service delivery capability.
  • Operating cash flow of 638.02M provides solid 1.27x coverage of current liabilities 504.32M, showing strong operational health.
  • Operating cash flow of 638.02M fully covers other non-current liabilities 43.29M by 14.74x, showing strong long-term stability.

Bear case

  • Operating cash flow of 638.02M barely covers its investment activities of (673.91M), with a coverage ratio of -0.95, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 638.02M provides thin coverage of dividend payments of (496.80M) with a -1.28 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 7.74M provide limited coverage of acquisition spending of (175.42M), which is -0.04x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 172.14M provides weak coverage of capital expenditures of 465.88M, with a 0.37 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 300.81M show weak coverage of depreciation charges of 369.79M, with a 0.81 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2024)

Concentration Risk Benchmark Breakdown of Revenue (2024)

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 100.05 Bn 24.60 2.15 75.15 Bn
2 WMB Williams Companies, Inc. 73.60 Bn 31.09 6.40 27.99 Bn
3 EPD Enterprise Products Partners L.P. 69.94 Bn 12.09 1.32 33.58 Bn
4 KMI Kinder Morgan, Inc. 60.62 Bn 22.23 3.69 32.58 Bn
5 ET Energy Transfer LP 58.05 Bn 13.46 0.73 63.97 Bn
6 TRP Tc Energy Corp 55.97 Bn 22.78 5.27 44.47 Bn
7 MPLX Mplx Lp 54.03 Bn 11.23 4.22 25.92 Bn
8 OKE Oneok Inc /New/ 44.55 Bn 13.34 1.41 33.73 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.36 3.39
EV to Cash from Ops. EV/CFO 15.30 7.77
EV to Debt EV to Debt 2.31 -68.56
EV to EBIT EV/EBIT 32.45 12.77
EV to EBITDA EV/EBITDA 19.14 7.47
EV to Free Cash Flow [EV/FCF] EV/FCF 56.70 13.20
EV to Market Cap EV to Market Cap 1.69 2.49
EV to Revenue EV/Rev 5.68 4.48
Price to Book Value [P/B] P/B -3.25 94.01
Price to Earnings [P/E] P/E 89.51 12.31
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.13 -3.60
Dividend Payout Ratio % Div Payout % (Qtr) 761.00 72.05
Dividend per Basic Share Div per Share (Qtr) 3.12 1.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 112.15 32.66
Interest Coverage Int. cover (Qtr) 1.35 5.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -109.49 -17.97
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -62.14 16,113.89
Dividend Growth (1y) % Div 1y % (Qtr) -17.46 -1.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -73.58 -5.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -2.05 -4.54
EBIT Growth (1y) % EBIT 1y % (Qtr) -23.84 -11.94
EBT Growth (1y) % EBT 1y % (Qtr) -49.24 -230.00
EPS Growth (1y) % EPS 1y % (Qtr) -92.78 -44.55
FCF Growth (1y) % FCF 1y % (Qtr) -61.74 -0.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -1.15 -1.23
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.24 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.45 0.21
Cash Ratio Cash Ratio (Qtr) 0.02 0.81
Current Ratio Curr Ratio (Qtr) 0.63 1.65
Debt to Equity Ratio Debt/Equity (Qtr) -2.38 1.11
Interest Cover Ratio Int Coverage (Qtr) 1.35 5.11
Times Interest Earned Times Interest Earned (Qtr) 1.35 5.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 39.00 35.86
EBIT Margin % EBIT Margin % (Qtr) 17.49 27.76
EBT Margin % EBT Margin % (Qtr) 4.49 17.28
Gross Margin % Gross Margin % (Qtr) 37.30 48.56
Net Profit Margin % Net Margin % (Qtr) 3.70 15.36