Targa Resources Partners (NGLS) is a publicly traded master limited partnership (for more on MLPs, see The Market Realist guide to master limited partnerships) that’s engaged in a variety of midstream energy functions, mostly gathering, processing, and storing hydrocarbons such as natural gas, natural gas liquids or “NGLs,” crude oil, and petroleum products. The company operates two major divisions: Gathering and Processing, and Logistics and Marketing.
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During 2013, Targa generated revenues totaling $6.56 billion and adjusted EBITDA of $629 million. The company has a current market cap of $6.1 billion and enterprise value of $9.2 billion (implying EV/LTM EBITDA of 14x). The company recently gave 2014E EBITDA guidance of $750+ million (implying EV/2014E EBITDA of 12x). Targa’s last declared distribution was $0.7475 per unit, implying an annualized distribution yield of 5.6%. The company’s debt-to-EBITDA ratio (leverage) at year end 2013 was 3.6x (note that Targa has stated in the past that it would aim to maintain leverage at 3x to 4x).
In next parts of this series, we’ll give a brief overview of Targa’s operations as well as discuss the company’s recent performance and outlook.