Keyera Corp KEY

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CAD 36.74 +0.05 (0.14%)

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As of May 17, 2024 8:00pm Delayed Price Closed

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Company Report

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Keyera Earnings: Marketing Guidance Reset Again; We've Now Moved Beyond Firm's Base

Stephen Ellis May 14, 2024

Keyera’s first-quarter earnings were a bit better than expected, due to marketing outperformance yet again. Overall EBITDA improved 8% to CAD 314 million from last year’s levels. This marketing streak has continued a pattern for some time now, and Keyera continues to cling to its base marketing guidance of a midpoint of CAD 330 million. Now, 2024 is expected to achieve a midpoint of CAD 450 million, reflecting the continued strength of the iso-octane business. We’ve boosted our forecast for 2024 similarly, but also made sure that our 2025-28 marketing forecast reflects a minimum of CAD 476 million per year in contributions. Our revised fair value estimate is now CAD 36, up from CAD 34. Our no moat rating is unchanged.

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Price vs Fair Value

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KEY is trading at a 116% premium.

Price

CAD 36.74

May 17, 2024

Fair Value

CAD 45.00

May 14, 2024

Uncertainty

Medium

1-Star Price: CAD 23.50
5-Star Price: CAD 52.30
Economic Moat: Rhnx
Capital Allocation: Jxfbyqz

Bulls Say, Bears Say

Bulls

Keyera has a strong dividend profile with a dividend payout ratio targeted at 50%-70% of distributable cash flow.

Bears

New pipeline projects similar to KAPS may face regulatory headwinds, limiting potential growth opportunities for Keyera.

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Trading Information

Previous Close Price: CAD 36.69
Day Range: CAD 36.45–36.75
52-Week Range: CAD 29.31–36.94
Bid/Ask: CAD 36.62 / CAD 36.80
Market Cap: CAD 8.42 Bil
Volume/Avg: 1.2 Mil / 950,521

Key Statistics

Price/Earnings (Normalized): 15.22
Price/Sales: 1.24
Dividend Yield (Trailing): 5.39%
Dividend Yield (Forward): 5.44%
Total Yield: 5.39%

Company Profile

Keyera is a midstream energy business that operates primarily out of Alberta. Its primary lines of business consist of the gathering and processing of natural gas in western Canada, the storage, transportation, and liquids blending for natural gas liquids and crude oil, and the marketing of NGLs, iso-octane, and crude oil. The firm currently has interests in about a dozen active gas plants and operates over 4,000 kilometers of pipelines.

Sector: Energy
Industry: Oil & Gas Midstream
Stock Style Box: Mid Core
Total Number of Employees: 1,155
Website: https://www.keyera.com

Competitors

Valuation

Metric	KEY	PPL	TRP
Price/Earnings (Normalized)	15.22	16.70	12.34
Price/Book Value	3.06	2.02	1.99
Price/Sales	1.24	3.27	3.36
Price/Cash Flow	8.31	9.90	7.34

Price/Earnings

KEY

PPL

TRP

Financial Strength

Metric	KEY	PPL	TRP
Quick Ratio	0.73	0.92	0.58
Current Ratio	1.08	1.03	0.94
Interest Coverage	3.08	5.56	2.42

Quick Ratio

KEY

PPL

TRP

Profitability

Metric	KEY	PPL	TRP
Return on Assets (Normalized)	6.34%	5.68%	2.80%
Return on Equity (Normalized)	19.82%	13.34%	11.49%
Return on Invested Capital (Normalized)	10.32%	8.03%	5.26%

Return on Assets

KEY

PPL

TRP

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