Energy Transfer Equity LP

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ETE : NYSE : Basic Materials
$18.87 | %
Today's Range: 18.61 - 18.94
Avg. Daily Volume: 6350000.0
02/24/17 - 4:00 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, underperforming the average competitor within its 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 Volume6845651.05435744.0

Valuation


HOLD. The current P/E ratio indicates a significant discount compared to an average of 146.60 for the Oil, Gas & Consumable Fuels industry and a discount compared to the S&P 500 average of 26.35. 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 18.75 Peers 146.60   ETE 6.05 Peers 12.63

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 15.67 Peers 35.50   ETE NM Peers 2.02

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 32.24   ETE 9.67 Peers -20.00

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 0.56 Peers 2.73   ETE -17.60 Peers -12.86

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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