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Comparing Cheniere Energy’s Valuation to Peers’


Jan. 30 2019, Updated 4:20 p.m. ET


Cheniere Energy (LNG) stock rallied approximately 11% in the last 12 months. It’s trading at a forward EV-to-EBITDA multiple of 13.7x, based on its projected earnings for the next 12 months. Peers’ average forward valuation is close to ~11x. So Cheniere Energy stock seems expensive compared to its peers. However, its earnings are expected to increase ~30% in 2019, according to analysts, which is higher than many of its peers. The expected healthy earnings growth likely justifies the premium valuation.

The chart above compares stock price movements for Cheniere Energy with the Global X MLP and Infrastructure ETF (MLPX) and broader markets. Cheniere accounts for 7% of MLPX while Kinder Morgan and Williams Companies account for almost 9% and 8%, respectively.

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Valuation comparison

Williams Companies (WMB) stock is trading at a forward EV-to-EBITDA multiple of 11x, based on its estimated earnings, and its five-year historical average multiple is ~18x. Williams Companies looks cheap compared to those multiples and its historical average.

Kinder Morgan (KMI) is trading at a valuation multiple close to 9.6x, which is lower than the industry average.

Cheniere Energy Partners (CQP) declared a quarterly distribution of $0.59 per unit of record as of February 6, which implies an annualized distribution of $2.36 per unit for 2019 with a yield of 6.1%.


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