Targa Resources: A Look at Forecasted Growth and Increased Cash Returns in 2025

Sunday, 26 May 2024, 09:19

Targa Resources, a lesser-known pipeline company, has shown outstanding performance this year, outperforming the S&P 500. With expectations of surging free cash flow in 2025 driven by expansion projects, Targa could continue its upward trajectory in the midstream industry. The company's record 2023, planned investment in expansion projects, and significant cash returns through dividends and share repurchases highlight its potential for future growth.
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Targa Resources: A Look at Forecasted Growth and Increased Cash Returns in 2025

Preparing for a re-acceleration

Targa Resources is coming off a record 2023. The company has grown its adjusted EBITDA by 22% to over $3.5 billion. It sees adjusted EBITDA rising by around 8% to $3.7-$3.9 billion this year. Targa plans to invest $2.3-$2.5 billion in expansion projects, expecting a decline in capital spending next year.

Ramping up cash returns

After funding expansion projects, Targa already generates significant free cash flow, enabling it to return value to shareholders through dividends and buybacks. The company has increased its dividend by 50% this year to $3.00 per share, surpassing the S&P 500. Future growth opportunities in natural gas processing and NGL fractionation could further boost its dividend potential.

Lots of fuel to continue growing its dividend

Benefiting from strong market conditions and future projects, Targa Resources aims to sustain its impressive returns. With planned expansion projects, the company is set to enjoy rising cash flow and earnings, potentially driving its stock price higher.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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