In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Cheniere Energy LNG and its primary competitors in the Oil, Gas & Consumable Fuels industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
Cheniere Energy Background
Cheniere Energy owns and operates the Sabine Pass liquefied natural gas terminal via its stake in Cheniere Partners. It also owns the Corpus Christi LNG terminals as well as Cheniere Marketing, which markets LNG using Cheniere's gas volumes.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Cheniere Energy Inc | 9.45 | 9.05 | 2.56 | 20.2% | $1.93 | $1.7 | -20.75% |
| Enterprise Products Partners LP | 11 | 2.24 | 1.15 | 5.0% | $2.31 | $1.72 | 26.59% |
| Williams Companies Inc | 19.19 | 4.43 | 5.21 | 3.25% | $1.43 | $1.35 | -5.92% |
| Energy Transfer LP | 13.29 | 1.58 | 0.63 | 3.37% | $4.19 | $3.91 | 13.15% |
| ONEOK Inc | 20.36 | 3.22 | 2.67 | 4.71% | $1.58 | $1.74 | 31.14% |
| Kinder Morgan Inc | 19.38 | 1.55 | 3.06 | 1.88% | $1.58 | $2.02 | 2.03% |
| MPLX LP | 10.33 | 3.18 | 4.02 | 8.65% | $1.74 | $1.19 | 7.53% |
| Targa Resources Corp | 30.30 | 12.78 | 1.98 | 11.54% | $0.98 | $1.02 | 4.65% |
| Western Midstream Partners LP | 9.73 | 4.36 | 4.20 | 11.34% | $0.64 | $0.69 | 22.67% |
| Plains All American Pipeline LP | 15.55 | 1.18 | 0.24 | 1.75% | $0.76 | $0.47 | 11.47% |
| DT Midstream Inc | 18 | 1.73 | 7.59 | 2.3% | $0.23 | $0.19 | 8.93% |
| Antero Midstream Corp | 17.73 | 3.21 | 6 | 4.02% | $0.22 | $0.18 | 4.17% |
| EnLink Midstream LLC | 47.53 | 7.17 | 0.96 | 4.2% | $0.31 | $0.33 | 2.18% |
| Frontline PLC | 8.33 | 2.04 | 2.57 | 7.81% | $0.35 | $0.22 | 8.44% |
| Ultrapar Participacoes SA | 9.35 | 1.83 | 0.21 | 3.12% | $1.49 | $2.11 | 9.3% |
| Plains GP Holdings LP | 22.63 | 2.46 | 0.07 | 2.59% | $0.74 | $0.82 | 11.47% |
| Scorpio Tankers Inc | 5.36 | 1.24 | 2.55 | 8.0% | $0.31 | $0.25 | 15.6% |
| Hafnia Ltd | 4.47 | 1.46 | 1.20 | 10.64% | $0.33 | $0.47 | 18.58% |
| Hess Midstream LP | 15.40 | 6.97 | 1.79 | 11.39% | $0.28 | $0.31 | 12.7% |
| TORM PLC | 4.24 | 1.54 | 1.85 | 9.46% | $0.26 | $0.28 | 13.9% |
| Transportadora de Gas del Sur SA | 28.44 | 1.76 | 5.81 | 5.63% | $178.98 | $147.88 | 25.83% |
| International Seaways Inc | 4.71 | 1.30 | 2.38 | 7.86% | $0.2 | $0.14 | -11.91% |
| New Fortress Energy Inc | 8.64 | 1.34 | 0.88 | -5.57% | $0.02 | $0.16 | -23.75% |
| Average | 15.63 | 3.12 | 2.59 | 5.59% | $9.04 | $7.61 | 9.49% |
Upon analyzing Cheniere Energy, the following trends can be observed:
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At 9.45, the stock's Price to Earnings ratio is 0.6x less than the industry average, suggesting favorable growth potential.
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The elevated Price to Book ratio of 9.05 relative to the industry average by 2.9x suggests company might be overvalued based on its book value.
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The Price to Sales ratio is 2.56, which is 0.99x the industry average. This suggests a possible undervaluation based on sales performance.
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With a Return on Equity (ROE) of 20.2% that is 14.61% above the industry average, it appears that the company exhibits efficient use of equity to generate profits.
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The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.93 Billion is 0.21x below the industry average, suggesting potential lower profitability or financial challenges.
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With lower gross profit of $1.7 Billion, which indicates 0.22x below the industry average, the company may experience lower revenue after accounting for production costs.
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The company is witnessing a substantial decline in revenue growth, with a rate of -20.75% compared to the industry average of 9.49%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By evaluating Cheniere Energy against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
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When compared to its top 4 peers, Cheniere Energy has a moderate debt-to-equity ratio of 5.99.
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This implies that the company maintains a balanced financial structure with a reasonable level of debt and an appropriate reliance on equity financing.
Key Takeaways
The low P/E ratio of Cheniere Energy suggests that the company's stock price is relatively inexpensive compared to its earnings. However, the high P/B ratio indicates that the stock may be overvalued based on its book value. The low P/S ratio implies that the company's stock price is attractive relative to its revenue. On the other hand, the high ROE, low EBITDA, low gross profit, and low revenue growth of Cheniere Energy may raise concerns about its financial performance compared to industry peers in the Oil, Gas & Consumable Fuels sector.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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