APA Group APA

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A$7.74 +0.04 (0.52%)

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As of Jul 26, 2024 6:10am Delayed Price Closed

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Accretive Expansion Opportunities Underpin a Good Outlook for APA Group

Adrian Atkins Jun 18, 2024

APA Group is Australia's premier gas infrastructure company. Limited regulation, scale, and a superior skills base help it capitalize on gas demand growth and generate competitive advantages that warrant a narrow economic moat. However, gas market reform and potential regulation of pipelines could weaken its competitive advantages. Fair value uncertainty is medium, as secure revenue is balanced by high gearing and limited transparency over customer contracts.

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Price vs Fair Value

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APA is trading at a 329% premium.

Price

A$7.74

Jul 26, 2024

Fair Value

A$9.40

Nov 5, 2023

Uncertainty

Medium

1-Star Price: A$23.11
5-Star Price: A$2.53
Economic Moat: Bfknry
Capital Allocation: Lnmw

Bulls Say, Bears Say

Bulls

APA Group owns and operates an excellent portfolio of gas infrastructure assets. Its large footprint ensures it is at least partially exposed to growth anywhere in the country.

Bears

Gas market reform is a risk to returns. From 2018, high levels of financial disclosure help customers negotiate better deals. This is backed up by binding arbitration. A new review underway will consider full regulation of its best assets.

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Trading Information

Previous Close Price: A$7.70
Day Range: A$7.65–7.74
52-Week Range: A$7.65–10.14
Bid/Ask: A$7.70 / A$7.75
Market Cap: A$9.93 Bil
Volume/Avg: 3.6 Mil / 2.6 Mil

Key Statistics

Price/Earnings (Normalized): 7.65
Price/Sales: 3.24
Dividend Yield (Trailing): 7.24%
Dividend Yield (Forward): 7.24%
Total Yield: 7.24%

Company Profile

APA Group is Australia's largest gas infrastructure company with an extensive portfolio of transmission pipelines, distribution networks, and storage facilities, and is increasingly investing in renewable energy generation, electricity transmission, and batteries. It is internally managed and has direct operational control over all assets. It owns minority stakes in a few smaller gas infrastructure companies and manages operations for most of these. The stapled securities comprise a unit in Australian Pipeline Trust and in APT Investment Trust.

Sector: Utilities
Industry: Utilities - Regulated Gas
Stock Style Box: Mid Growth
Total Number of Employees: 1,600
Website: https://www.apa.com.au

Competitors

Valuation

Metric	APA	KMI	WMB
Price/Earnings (Normalized)	7.65	18.91	21.84
Price/Book Value	2.73	1.56	4.18
Price/Sales	3.24	3.09	4.90
Price/Cash Flow	7.55	7.44	8.85

Price/Earnings

APA

KMI

WMB

Financial Strength

Metric	APA	KMI	WMB
Quick Ratio	1.12	0.23	0.37
Current Ratio	1.27	0.37	0.52
Interest Coverage	3.39	2.78	4.05

Quick Ratio

APA

KMI

WMB

Profitability

Metric	APA	KMI	WMB
Return on Assets (Normalized)	6.65%	3.57%	4.89%
Return on Equity (Normalized)	47.49%	8.24%	20.70%
Return on Invested Capital (Normalized)	10.73%	6.22%	8.53%

Return on Assets

APA

KMI

WMB

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