Plains Gp Holdings Lp (NASDAQ: PAGP)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0001581990
Market Cap 3.97 Bn
P/B 2.95
P/E 21.32
P/S 0.09
ROIC (Qtr) 9.28
Div Yield % 9.58
Rev 1y % (Qtr) -7.05
Total Debt (Qtr) 9.64 Bn
Debt/Equity (Qtr) 7.17

About

Price action

Investment thesis

Bull case

  • Strong tangible asset base of 27.68B provides 2.87x coverage of total debt 9.64B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 2.87B provides strong 55.25x coverage of stock compensation 52M, indicating sustainable incentive practices.
  • Strong operating cash flow of 2.87B provides 7.89x coverage of SG&A expenses 364M, showing efficient operational cost management.
  • Robust free cash flow of 2.21B exceeds capital expenditure of 659M by 3.36x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 27.68B provides 126.98x coverage of working capital 218M, indicating strong operational backing.

Bear case

  • Operating cash flow of 2.87B barely covers its investment activities of (1.76B), with a coverage ratio of -1.63, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.87B provides thin coverage of dividend payments of (288M) with a -9.98 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 1.18B provide limited coverage of acquisition spending of (969M), which is -1.22x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 3.62B relative to inventory of 411M (8.82 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of 776M show weak coverage of depreciation charges of 953M, with a 0.81 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2024)

Segments 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 0.42 3.39
EV to Cash from Ops. EV/CFO 4.31 7.77
EV to Debt EV to Debt 1.28 -68.56
EV to EBIT EV/EBIT 15.95 12.77
EV to EBITDA EV/EBITDA 5.40 7.47
EV to Free Cash Flow [EV/FCF] EV/FCF 5.59 13.20
EV to Market Cap EV to Market Cap 3.12 2.49
EV to Revenue EV/Rev 0.27 4.48
Price to Book Value [P/B] P/B 2.95 94.01
Price to Earnings [P/E] P/E 21.32 12.31
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.65 -3.60
Dividend Payout Ratio % Div Payout % (Qtr) 157.00 72.05
Dividend per Basic Share Div per Share (Qtr) 1.52 1.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 13.59 32.66
Interest Coverage Int. cover (Qtr) 1.83 5.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 17.83 -17.97
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 84.24 16,113.89
Dividend Growth (1y) % Div 1y % (Qtr) 18.75 -1.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 14.35 -5.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 1.19 -4.54
EBIT Growth (1y) % EBIT 1y % (Qtr) 8.53 -11.94
EBT Growth (1y) % EBT 1y % (Qtr) 6.34 -230.00
EPS Growth (1y) % EPS 1y % (Qtr) 10.71 -44.55
FCF Growth (1y) % FCF 1y % (Qtr) 12.61 -0.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.30 -1.23
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.59 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.21
Cash Ratio Cash Ratio (Qtr) 0.22 0.81
Current Ratio Curr Ratio (Qtr) 1.04 1.65
Debt to Equity Ratio Debt/Equity (Qtr) 7.17 1.11
Interest Cover Ratio Int Coverage (Qtr) 1.83 5.11
Times Interest Earned Times Interest Earned (Qtr) 1.83 5.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 3.70 35.86
EBIT Margin % EBIT Margin % (Qtr) 1.66 27.76
EBT Margin % EBT Margin % (Qtr) 0.75 17.28
Gross Margin % Gross Margin % (Qtr) 6.00 48.56
Net Profit Margin % Net Margin % (Qtr) 0.40 15.36