Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 29 Apr, 25 | KEY | Buy | CAD 43.0 | CAD 45.45 | CAD 46.2 | 91 days | Closed |
2.00%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Keyera Corp. together with its subsidiaries, engages in the gathering and processing of natural gas; and the transportation, storage, and marketing of natural gas liquids (NGLs) in Canada and the United States. The company operates three segments: Gathering and Processing, Liquids Infrastructure, and Marketing. The Gathering and Processing segment owns and operates raw gas gathering pipelines and processing plants, which collect and process raw natural gas, remove waste products, and separate economic components, primarily natural gas liquids; and provides gas handling services and other ancillary services such as NGL extraction, NGL handling and loading services, and condensate stabilization. The Liquids Infrastructure segment offers, owns and operates a network of facilities including underground NGL storage caverns, above-ground storage tanks, NGL fractionation facilities, NGL and condensate pipelines as well as rail and truck terminals for the processing, fractionation, storage and transportation of the by-products of natural gas processing, including NGLs such as ethane, propane, butane and condensate, and it also produces iso-octane; and engages in the liquids blending activities. The Marketing segment offers propane, butane, condensate, iso-octane, as well as natural gas and crude oil. The company was formerly known as Keyera Facilities Income Fund and changed its name to Keyera Corp. in January 2011. Keyera Corp. was founded in 1998 and is headquartered in Calgary, Canada.
Higher Net Margin: 6.8% mn in FY 2024 vs 6.0% in FY 2023
Higher Operating Margin: 8.9% in FY 2024 vs 7.8% in FY 2023
Higher Debt to Equity Ratio: 1.38x in FY 2024 vs 0.43% of Industry Median
Lower Quick Ratio: 0.72x in FY 2024 vs 0.89x of Industry Median
Higher volatility in energy prices, Energy-related forward contracts, Interest rates, Foreign currency exchange rates, etc
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 43.0 | 40.43 | 45.45 | 46.2 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Earnings Growth Across Core Segments: The company delivered record full-year adjusted EBITDA of CAD 1.28 billion and record annual net earnings of CAD 487 million, both showing year-over-year growth. This performance was supported by realized margins across all three core business segments. Decent contributions were reported from the Liquids Infrastructure segment due to ramp-up of KAPS, higher condensate system volumes, and growing demand for fractionation and storage services.
Long-term Export Agreements: The company has secured long-term propane sales agreements tied to AltaGas' west coast Canadian export terminals, providing enhanced access to international pricing and diversifying its sales channels. In addition, AltaGas has committed to transporting additional NGL mix volumes including output from its under-construction Pipestone II plant—through its integrated network. This supports company's ongoing fractionation expansion plans and future rail and logistics development.
An income Play: The dividend pay-out practice translates into an essential factor for regular income-seeking investors with a long-term horizon. In 2024, the company increased its dividend once again, supported by the continued growth in its fee-based business. Moreover, at the last closing price of CAD 43.00 as on 28 April 2025, the stock offered a healthy dividend yield of ~4.88%, which looks decent considering the current interest rates.
Considering the expected valuation upside, elevated results across all three business segments, decent financial position, attractive guidance, growth under fee for services segment, healthy dividend yield, current trading levels and key business risks, a ‘Buy’ recommendation has been given on the stock of KEY at the last closing price of CAD 43.00, as on April 28, 2025
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas Midstream
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| KEY Keyera Corp. |
-0.1 0.23% | 43.72 | 18.39 | 20.41 | 1.37 | 3.55 | 1.88 | 10.80 |
| ENB Enbridge Inc |
0.01 0.02% | 62.09 | 22.90 | 20.92 | 2.21 | 2.19 | 3.98 | 12.93 |
| TRP TC Energy Corp |
0.13 0.20% | 64.87 | 16.04 | 17.99 | 4.85 | 2.29 | 7.78 | 11.61 |
| PPL Pembina Pipeline Corp |
0.07 0.14% | 51.02 | 16.57 | 16.47 | 3.63 | 1.91 | 5.56 | 13.16 |
| ALA AltaGas Ltd |
0.47 1.16% | 41.12 | 20.38 | 17.01 | 0.90 | 1.32 | 1.73 | 13.25 |
Data Powered by EOD Historical Data (“EODHD”).
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 28, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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