Dorian Lpg Ltd. (NYSE: LPG)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0001596993
Market Cap 1.38 Bn
P/B 1.27
P/E 11.39
P/S 3.40
ROIC (Qtr) 7.85
Div Yield % 5.41
Rev 1y % (Qtr) 48.72
Total Debt (Qtr) 673.63 Mn
Debt/Equity (Qtr) 0.62

About

Dorian LPG Ltd., a company listed on the New York Stock Exchange (NYSE) under the ticker symbol LPG, is a prominent player in the liquefied petroleum gas (LPG) transportation industry. The company, established in 2013, is headquartered in the United States and operates a fleet of 25 very large gas carriers (VLGCs), designed to transport LPG and other petrochemical products across the globe. Dorian LPG's primary business activities revolve around the transportation of LPG and petrochemicals. The company operates in the VLGC segment of the LPG shipping...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 294.49M provide 2.02x coverage of short-term debt 145.56M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 178.19M provides strong 17.47x coverage of stock compensation 10.20M, indicating sustainable incentive practices.
  • Strong tangible asset base of 1.78B provides 2.64x coverage of total debt 673.63M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 135.25M exceeds capital expenditure of 42.94M by 3.15x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 178.19M provides 3.71x coverage of SG&A expenses 47.98M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 178.19M barely covers its investment activities of (32.94M), with a coverage ratio of -5.41, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 178.19M provides thin coverage of dividend payments of (105.03M) with a -1.70 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 100.85M relative to inventory of 2.25M (44.81 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of 151.10M show weak coverage of depreciation charges of 109.14M, with a 1.38 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 135.25M represents just -2.51x of debt issuance (53.88M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

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 110.33 Bn 27.13 2.37 75.15 Bn
2 EPD Enterprise Products Partners L.P. 76.10 Bn 12.98 1.39 33.58 Bn
3 KMI Kinder Morgan, Inc. 68.80 Bn 28.77 4.49 32.58 Bn
4 TRP Tc Energy Corp 62.22 Bn 25.32 5.86 44.47 Bn
5 WMB Williams Companies, Inc. 50.26 Bn -71.19 6.88 27.99 Bn
6 TRGP Targa Resources Corp. 36.23 Bn -86.30 4.92 17.43 Bn
7 OKE Oneok Inc /New/ 35.88 Bn 31.48 3.74 33.73 Bn
8 CQP Cheniere Energy Partners, L.P. 30.34 Bn 27.99 4.44 14.76 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.00 3.64
EV to Cash from Ops. EV/CFO 10.01 35.75
EV to Debt EV to Debt 2.65 -70.28
EV to EBIT EV/EBIT 11.80 14.85
EV to EBITDA EV/EBITDA 7.21 22.44
EV to Free Cash Flow [EV/FCF] EV/FCF 13.18 114.09
EV to Market Cap EV to Market Cap 1.32 2.72
EV to Revenue EV/Rev 4.41 7.62
Price to Book Value [P/B] P/B 1.25 20.25
Price to Earnings [P/E] P/E 11.20 54.32
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.15 -3.70
Dividend Payout Ratio % Div Payout % (Qtr) 86.30 71.27
Dividend per Basic Share Div per Share (Qtr) 1.75 1.48
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 55.12 33.30
Interest Coverage Int. cover (Qtr) 4.98 5.27
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -40.45 -7.43
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -6.37 16,427.94
Dividend Growth (1y) % Div 1y % (Qtr) -56.25 -0.84
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -24.01 -1.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -11.40 -3.58
EBIT Growth (1y) % EBIT 1y % (Qtr) -24.01 -8.36
EBT Growth (1y) % EBT 1y % (Qtr) -25.15 -232.78
EPS Growth (1y) % EPS 1y % (Qtr) -27.55 -43.63
FCF Growth (1y) % FCF 1y % (Qtr) -45.13 -0.90
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -11.02 -0.09
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.23 0.77
Cash Payout Ratio Cash Payout (Qtr) 0.47 0.21
Cash Ratio Cash Ratio (Qtr) 1.81 0.80
Current Ratio Curr Ratio (Qtr) 2.42 1.65
Debt to Equity Ratio Debt/Equity (Qtr) 0.62 1.12
Interest Cover Ratio Int Coverage (Qtr) 4.98 5.27
Times Interest Earned Times Interest Earned (Qtr) 4.98 5.27
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 64.40 35.59
EBIT Margin % EBIT Margin % (Qtr) 37.39 27.76
EBT Margin % EBT Margin % (Qtr) 29.88 17.49
Gross Margin % Gross Margin % (Qtr) 63.90 48.68
Net Profit Margin % Net Margin % (Qtr) 29.90 15.46