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Keyera Corp. (TSE:KEY)
TSX:KEY
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Keyera Corp.
(TSX:KEY)79Outperform
Keyera Corp. (KEY) vs. S&P 500 (SPY)
Market Cap
C$9.26B
Dividend Yield4.92%
Average Volume (3M)1.10M
Price to Earnings (P/E)19.0
Beta (1Y)0.69
Revenue Growth2.89%
EPS Growth14.76%
CountryCA
Employees1,155
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)2.12
Shares Outstanding229,153,370
10 Day Avg. Volume1,344,074
30 Day Avg. Volume1,095,536
Financial Highlights & Ratios
PEG Ratio1.29
Price to Book (P/B)N/A
Price to Sales (P/S)1.33
Price to Cash Flow (P/CF)7.50
P/FCF Ratio9.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$46.15Price Target Upside14.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Keyera Corp. Business Overview & Revenue Model
Company DescriptionKeyera operates as a midstream energy business in western Canada. Its primary operations consist of gathering, processing, and fractionation of natural gas in western Canada; storage and transportation of crude oil and natural gas byproducts; and marketing of natural gas liquids. The company operates over 5,000 kilometers of gathering pipelines and 15 natural gas processing plants.
How the Company Makes MoneyKeyera Corp. generates revenue through various streams related to its energy infrastructure services. The primary revenue source is the fees collected from the gathering and processing of natural gas and NGLs, which involve treating and preparing these resources for transportation and sale. Additionally, Keyera earns income from the transportation and storage of these products via its pipeline network and storage facilities. The company also engages in marketing activities, where it buys and sells natural gas, NGLs, and crude oil, capturing margins on these transactions. Key partnerships with oil and gas producers and strategic contracts contribute significantly to its earnings by ensuring a stable flow of resources through its infrastructure. This diversified approach enables Keyera to maintain robust revenue streams regardless of fluctuations in commodity prices.
Keyera Corp. Financial Statement Overview
Summary
Keyera Corp. is in a strong financial position with solid revenue growth, improved profitability, and robust cash flows. The company demonstrates consistent revenue growth and improved profitability with a net income increase of 14.75%. Cash flows are robust with a 271.59% increase in free cash flow. However, the decrease in cash and cash equivalents requires close monitoring.Income Statement
Keyera Corp. demonstrates a strong performance with consistent revenue growth, shown by a 1.95% increase in total revenue from 2023 to 2024. The gross profit margin decreased slightly, but net income grew by 14.75%, indicating improved profitability. The EBITDA margin remains healthy, reflecting efficient operational management.85
Very Positive
Balance Sheet
The balance sheet shows a stable financial position with a debt-to-equity ratio of 1.38, indicating manageable leverage. The equity ratio is 32.35%, suggesting a solid equity base. However, the decrease in cash and cash equivalents warrants attention for liquidity management.78
Positive
Cash Flow
Keyera Corp. exhibits robust cash flows with a significant increase in free cash flow by 271.59% from 2023 to 2024. The operating cash flow to net income ratio is strong, highlighting efficient cash generation from operations. However, the negative financing cash flow reflects ongoing debt repayments.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.14B | 7.00B | 7.06B | 4.98B | 3.01B | Gross Profit |
| 1.03B | 1.06B | 917.52M | 787.66M | 650.12M | EBIT |
| 0.00 | 901.84M | 801.91M | 693.46M | 588.81M | EBITDA |
| 1.21B | 1.07B | 858.12M | 853.21M | 495.18M | Net Income Common Stockholders |
| 486.63M | 424.03M | 328.29M | 324.21M | 62.03M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 118.44M | 20.09M | -209.40M | 15.94M | 2.90M | Total Assets |
| 8.76B | 8.78B | 8.57B | 8.13B | 7.56B | Total Debt |
| 3.90B | 4.29B | 3.90B | 3.70B | 3.43B | Net Debt |
| 3.78B | 4.27B | 4.11B | 3.68B | 3.43B | Total Liabilities |
| 5.92B | 6.00B | 5.75B | 5.47B | 4.80B | Stockholders Equity |
| 2.83B | 2.78B | 2.82B | 2.66B | 2.76B |
| Cash Flow | Free Cash Flow | |||
| 1.01B | 272.80M | 29.40M | 67.21M | 27.84M | Operating Cash Flow |
| 1.27B | 975.49M | 925.33M | 583.84M | 688.17M | Investing Cash Flow |
| -235.31M | -819.71M | -843.92M | -397.12M | -748.31M | Financing Cash Flow |
| -935.65M | -134.26M | -100.65M | -173.85M | 53.80M |
Keyera Corp. Technical Analysis
Negative
40.41
Price Trends
42.52
Negative
43.22
Negative
40.58
Negative
Market Momentum
-0.25
Positive
36.85
Neutral
31.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KEY, the sentiment is Negative. The current price of 40.41 is below the 20-day moving average (MA) of 41.90, below the 50-day MA of 42.52, and below the 200-day MA of 40.58, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 36.85 is Neutral, neither overbought nor oversold. The STOCH value of 31.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:KEY.
Keyera Corp. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Performance Comparison
TSE:KEY
Keyera Corp.
39.80
7.52
23.30%
ENB
Enbridge
42.00
8.24
24.41%
PBA
Pembina Pipeline
37.86
3.98
11.75%
TRP
TC Energy
45.88
11.13
32.03%
GBNXF
Gibson Energy
14.73
-0.91
-5.82%
ATGFF
AltaGas
25.87
5.06
24.32%
Keyera Corp. Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -3.42% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with record-breaking results in multiple areas, including adjusted EBITDA and net earnings. Strategic growth initiatives and operational safety achievements further bolstered the positive outlook. However, challenges such as the AEF operational issue and the potential impact of U.S. tariffs introduced some near-term uncertainties. Despite these challenges, the overall sentiment remains positive due to the company's solid financial position and strategic growth plans.Highlights
Record Financial Performance
Keyera achieved record annual adjusted EBITDA of $1.3 billion, up from $1.2 billion the prior year, and net earnings of $487 million, up from $424 million. This was driven by record margin contributions across all business segments.
Dividend Increase
Keyera raised its dividend by 4% and received approval for a normal course issuer bid, reflecting strong financial health and commitment to returning value to shareholders.
Strategic Growth Initiatives
Keyera sanctioned the KFS frac 2 debottleneck project, expected in service by mid-2026, and advanced contracting for KFS frac 3 and Capstone 4, supporting future growth.
Operational Safety Achievements
For the second consecutive year, Keyera reported no lost time incidences, highlighting a strong safety culture within the organization.
Strong Volume Growth
Record annual volumes were achieved in multiple segments: Wapiti and Pipestone set records in the North G&P segment, and the condensate system in the Liquids Infrastructure segment also reached new highs.
Lowlights
AEF Operational Issue
Keyera will take the Alberta EnviroFuels (AEF) facility offline for approximately six weeks in the spring to address an unexpected operational issue, with an estimated margin impact of $40 million.
Potential Impact of U.S. Tariffs
The threat of U.S. tariffs on ISO octane creates near-term uncertainty for Keyera, although the company expects the impact to be mitigated by lower butane costs, higher RBOB spreads, and favorable FX movements.
Decreased Distributable Cash Flow
Distributable cash flow decreased to $771 million for the year from $855 million the prior year, primarily due to higher cash taxes.
Company Guidance
During the Keyera 2024 Year-end Conference Call, the company provided guidance that anticipates a 7% to 8% growth in fee-based EBITDA, driven largely by increased volumes and new customer acquisitions. The North G&P segment saw record volumes, and the Liquids Infrastructure segment continued to ramp up. The KFS frac debottleneck project, expected to add 8,000 barrels per day of capacity, is slated for mid-2026, while the Capstone 4 project aims for a 2027 in-service date. Despite a $40 million margin impact due to an AEF outage, Keyera maintains a strong financial position, ending 2024 with a net debt to EBITDA ratio of 2 times. The company also plans growth capital expenditures between $300 million and $330 million and maintenance capital expenditures between $70 million and $90 million for 2025, while continuing to focus on high-quality fee-for-service cash flows.Keyera Corp. Corporate Events
Business Operations and StrategyFinancial Disclosures
Keyera Corp. Achieves Record 2024 Financial Results Across All Segments
Positive
Feb 13, 2025
Keyera Corp. reported record financial results for 2024, with strong performance across all three business segments. The company achieved an annual adjusted EBITDA of $1.28 billion, driven by record contributions in its Liquids Infrastructure segment and robust results in its Marketing segment. Net earnings reached a record $487 million for the year, underscoring Keyera’s effective strategy execution and financial strength. The company anticipates continued growth through capacity utilization and capital-efficient projects, positioning itself well for future opportunities.
DividendsBusiness Operations and Strategy
Keyera Corp. Declares First Quarter 2025 Dividend
Positive
Feb 12, 2025
Keyera Corp. announced a quarterly cash dividend of $0.52 per common share for the first quarter of 2025, payable on March 31, 2025, highlighting its commitment to returning value to shareholders. This decision reflects Keyera’s stable financial position and strategic focus in the energy infrastructure sector, potentially enhancing shareholder confidence and reinforcing its market position.
Business Operations and Strategy
Keyera and AltaGas Forge Strategic Partnerships to Enhance Energy Infrastructure and Market Reach
Positive
Feb 7, 2025
Keyera Corp. and AltaGas Ltd. have announced strategic long-term agreements to enhance their infrastructure and expand market access. Keyera has secured a 15-year tolling contract at AltaGas’ Ridley Island Energy Export Facility to export LPGs, aiming to capture premium Asian markets, and AltaGas will utilize Keyera’s fractionation services and logistical infrastructure. These agreements aim to de-risk investments and ensure long-term growth and cash flow stability for both companies, strengthening Canada’s energy export capabilities.
Financial Disclosures
Keyera Corp. Schedules 2024 Year-End Results Announcement
Neutral
Jan 30, 2025
Keyera Corp. announced the timing of its 2024 year-end financial results, which will be released on February 13, 2025, accompanied by a conference call and webcast. This announcement underscores Keyera’s commitment to transparency and stakeholder engagement, potentially impacting investor relations and market perceptions.
Keyera Corp. Projects Strong Growth Through 2027
Dec 10, 2024
Keyera Corp. anticipates robust financial growth from 2024 to 2027, driven by strategic investments in its integrated asset base and capital-efficient projects. The company expects to achieve a 7-8% CAGR in fee-based adjusted EBITDA by optimizing its existing capacity and exploring new growth opportunities. Furthermore, Keyera plans significant capital expenditures for 2025 to support continued development and maintenance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.