Energy Transfer Equity LP

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ETE : NYSE : Basic Materials
$17.36 up 0.07 | 0.4%
Today's Range: 17.24 - 17.54
Avg. Daily Volume: 6538100.0
12/09/16 - 12:53 PM ET

Financial Analysis


ENERGY TRANSFER EQUITY LP's gross profit margin for the third quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Sales and net income have dropped, however the growth has outpaced the average competitor within the industry. ENERGY TRANSFER EQUITY LP has weak liquidity. Currently, the Quick Ratio is 0.50 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 87.96% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)9675.09823.0
EBITDA ($mil)1292.01174.0
EBIT ($mil)697.0650.0
Net Income ($mil)209.0293.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)472.01019.0
Total Assets ($mil)76839.070168.0
Total Debt ($mil)41324.036347.0
Equity ($mil)-1703.0-906.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin15.913.53
EBITDA Margin13.3511.95
Operating Margin7.26.62
Sales Turnover0.460.61
Return on Assets1.41.4
Return on Equity0.00.0
Debt Q3 FY16 Q3 FY15
Current Ratio0.921.2
Debt/Capital1.041.03
Interest Expense519.0481.0
Interest Coverage1.341.35


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)1047.01044.8
Div / share0.290.27
EPS0.190.28
Book value / share-1.63-0.87
Institutional Own % n/a n/a
Avg Daily Volume6560137.09203866.0

Valuation


HOLD. The current P/E ratio indicates a significant discount compared to an average of 40.81 for the Oil, Gas & Consumable Fuels industry and a discount compared to the S&P 500 average of 25.45. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, ENERGY TRANSFER EQUITY LP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ETE 16.24 Peers 40.81   ETE 5.24 Peers 13.41

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ETE is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ETE is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ETE 13.14 Peers 56.25   ETE NM Peers 2.25

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

ETE is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

ETE's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ETE NM Peers 23.55   ETE 9.67 Peers -249.88

Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ETE's P/B is negative making this valuation measure meaningless.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

ETE is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ETE 0.49 Peers 2.75   ETE -17.60 Peers -20.50

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ETE is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

ETE significantly trails its peers on the basis of sales growth

 

 

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