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 | 9.72 | 9.31 | 2.63 | 20.2% | $1.93 | $1.7 | -20.75% |
| Williams Companies Inc | 22.54 | 5.20 | 6.12 | 3.25% | $1.43 | $1.35 | -5.92% |
| Enterprise Products Partners LP | 11.12 | 2.26 | 1.17 | 5.0% | $2.31 | $1.72 | 26.59% |
| Energy Transfer LP | 13.78 | 1.64 | 0.65 | 3.37% | $4.19 | $3.91 | 13.15% |
| ONEOK Inc | 21.24 | 3.36 | 2.78 | 4.71% | $1.58 | $1.74 | 31.14% |
| Kinder Morgan Inc | 21.95 | 1.81 | 3.63 | 2.06% | $1.58 | $2.02 | 3.56% |
| MPLX LP | 10.62 | 3.27 | 4.13 | 8.65% | $1.74 | $1.19 | 7.53% |
| Targa Resources Corp | 34.68 | 14.62 | 2.27 | 11.54% | $0.98 | $1.02 | 4.65% |
| Western Midstream Partners LP | 9.81 | 4.40 | 4.24 | 11.34% | $0.64 | $0.69 | 22.67% |
| Plains All American Pipeline LP | 15.10 | 1.14 | 0.24 | 1.75% | $0.76 | $0.47 | 11.47% |
| DT Midstream Inc | 21.07 | 2.02 | 8.88 | 2.3% | $0.23 | $0.19 | 8.93% |
| Antero Midstream Corp | 18.60 | 3.37 | 6.30 | 4.02% | $0.22 | $0.18 | 4.17% |
| EnLink Midstream LLC | 49.03 | 7.39 | 0.99 | 4.2% | $0.31 | $0.33 | 2.18% |
| Frontline PLC | 7.40 | 1.81 | 2.28 | 7.81% | $0.27 | $0.22 | 8.44% |
| Ultrapar Participacoes SA | 8.16 | 1.59 | 0.18 | 3.12% | $1.49 | $2.11 | 9.3% |
| Hess Midstream LP | 15.17 | 7.82 | 1.76 | 11.39% | $0.28 | $0.31 | 12.7% |
| Plains GP Holdings LP | 21.61 | 2.35 | 0.07 | 2.59% | $0.74 | $0.82 | 11.47% |
| Transportadora de Gas del Sur SA | 31.41 | 1.94 | 6.42 | 5.63% | $178.98 | $147.88 | 25.83% |
| Hafnia Ltd | 3.88 | 1.27 | 1.05 | 10.64% | $0.33 | $0.47 | 18.58% |
| Scorpio Tankers Inc | 4.77 | 1.06 | 2.27 | 8.0% | $0.31 | $0.25 | 15.6% |
| TORM PLC | 3.43 | 1.26 | 1.50 | 9.46% | $0.26 | $0.28 | 13.9% |
| International Seaways Inc | 4.27 | 1.17 | 2.16 | 7.86% | $0.2 | $0.14 | -11.91% |
| New Fortress Energy Inc | 7.24 | 1.38 | 0.73 | -5.57% | $0.02 | $0.16 | -23.75% |
| Average | 16.22 | 3.28 | 2.72 | 5.6% | $9.04 | $7.61 | 9.56% |
By carefully studying Cheniere Energy, we can deduce the following trends:
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The stock's Price to Earnings ratio of 9.72 is lower than the industry average by 0.6x, suggesting potential value in the eyes of market participants.
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With a Price to Book ratio of 9.31, which is 2.84x the industry average, Cheniere Energy might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
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The Price to Sales ratio is 2.63, which is 0.97x the industry average. This suggests a possible undervaluation based on sales performance.
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The Return on Equity (ROE) of 20.2% is 14.6% above the industry average, highlighting efficient use of equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.93 Billion, which is 0.21x below the industry average, the company may face lower profitability or financial challenges.
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Compared to its industry, the company has lower gross profit of $1.7 Billion, which indicates 0.22x below the industry average, potentially indicating lower revenue after accounting for production costs.
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The company's revenue growth of -20.75% is significantly below the industry average of 9.56%. This suggests a potential struggle in generating increased sales volume.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio is a financial metric that helps determine the level of financial risk associated with a company's capital structure.
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.
When evaluating Cheniere Energy alongside its top 4 peers in terms of the Debt-to-Equity ratio, the following insights arise:
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Among its top 4 peers, Cheniere Energy is placed in the middle with a moderate debt-to-equity ratio of 5.99.
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This implies a balanced financial structure, with a reasonable proportion of debt and equity.
Key Takeaways
The low P/E ratio suggests Cheniere Energy is undervalued compared to its peers in the Oil, Gas & Consumable Fuels industry. However, the high P/B ratio indicates the stock may be overvalued based on its book value. The low P/S ratio implies the company's sales are relatively cheap compared to its market capitalization. On the other hand, the high ROE, low EBITDA, low gross profit, and low revenue growth indicate potential challenges in profitability and operational efficiency compared to industry peers.
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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