Intrinsic value of Inter Pipeline Ltd. - IPL

Previous Close

$25.41

  Intrinsic Value

$1.89

stock screener

  Rating & Target

str. sell

-93%

Previous close

$25.41

 
Intrinsic value

$1.89

 
Up/down potential

-93%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of IPL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.89
  26.00
  23.90
  22.01
  20.31
  18.78
  17.40
  16.16
  15.04
  14.04
  13.14
  12.32
  11.59
  10.93
  10.34
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
Revenue, $m
  1,825
  2,300
  2,849
  3,476
  4,182
  4,967
  5,832
  6,774
  7,793
  8,888
  10,055
  11,294
  12,603
  13,981
  15,426
  16,938
  18,518
  20,164
  21,878
  23,662
  25,516
  27,444
  29,446
  31,528
  33,691
  35,940
  38,279
  40,712
  43,245
  45,882
  48,630
Variable operating expenses, $m
 
  1,201
  1,480
  1,798
  2,157
  2,555
  2,994
  3,473
  3,990
  4,546
  5,138
  5,734
  6,399
  7,098
  7,832
  8,600
  9,401
  10,237
  11,108
  12,013
  12,955
  13,933
  14,950
  16,007
  17,105
  18,247
  19,434
  20,669
  21,955
  23,294
  24,689
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  1,046
  1,201
  1,480
  1,798
  2,157
  2,555
  2,994
  3,473
  3,990
  4,546
  5,138
  5,734
  6,399
  7,098
  7,832
  8,600
  9,401
  10,237
  11,108
  12,013
  12,955
  13,933
  14,950
  16,007
  17,105
  18,247
  19,434
  20,669
  21,955
  23,294
  24,689
Operating income, $m
  779
  1,099
  1,369
  1,678
  2,025
  2,412
  2,838
  3,302
  3,803
  4,342
  4,917
  5,560
  6,204
  6,883
  7,594
  8,339
  9,116
  9,927
  10,771
  11,649
  12,562
  13,511
  14,496
  15,521
  16,586
  17,693
  18,845
  20,043
  21,289
  22,588
  23,941
EBITDA, $m
  1,009
  1,509
  1,870
  2,282
  2,745
  3,260
  3,828
  4,446
  5,115
  5,834
  6,600
  7,413
  8,272
  9,176
  10,125
  11,118
  12,154
  13,235
  14,360
  15,531
  16,748
  18,013
  19,328
  20,694
  22,114
  23,590
  25,125
  26,722
  28,384
  30,116
  31,919
Interest expense (income), $m
  140
  202
  266
  339
  422
  517
  621
  736
  862
  998
  1,143
  1,299
  1,464
  1,638
  1,822
  2,014
  2,216
  2,426
  2,645
  2,874
  3,111
  3,358
  3,615
  3,882
  4,159
  4,447
  4,746
  5,058
  5,382
  5,719
  6,071
Earnings before tax, $m
  629
  896
  1,103
  1,339
  1,603
  1,896
  2,217
  2,565
  2,942
  3,344
  3,773
  4,261
  4,741
  5,245
  5,773
  6,325
  6,901
  7,501
  8,126
  8,775
  9,451
  10,152
  10,882
  11,640
  12,427
  13,246
  14,098
  14,985
  15,907
  16,868
  17,870
Tax expense, $m
  151
  242
  298
  362
  433
  512
  598
  693
  794
  903
  1,019
  1,151
  1,280
  1,416
  1,559
  1,708
  1,863
  2,025
  2,194
  2,369
  2,552
  2,741
  2,938
  3,143
  3,355
  3,576
  3,806
  4,046
  4,295
  4,554
  4,825
Net income, $m
  450
  654
  806
  977
  1,170
  1,384
  1,618
  1,873
  2,147
  2,441
  2,755
  3,111
  3,461
  3,829
  4,214
  4,617
  5,037
  5,476
  5,932
  6,406
  6,899
  7,411
  7,944
  8,497
  9,072
  9,670
  10,292
  10,939
  11,612
  12,314
  13,045

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  21
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  10,152
  12,775
  15,828
  19,312
  23,234
  27,597
  32,399
  37,635
  43,297
  49,375
  55,861
  62,745
  70,017
  77,670
  85,700
  94,102
  102,876
  112,023
  121,547
  131,456
  141,757
  152,464
  163,591
  175,154
  187,171
  199,665
  212,659
  226,177
  240,248
  254,901
  270,167
Adjusted assets (=assets-cash), $m
  10,131
  12,775
  15,828
  19,312
  23,234
  27,597
  32,399
  37,635
  43,297
  49,375
  55,861
  62,745
  70,017
  77,670
  85,700
  94,102
  102,876
  112,023
  121,547
  131,456
  141,757
  152,464
  163,591
  175,154
  187,171
  199,665
  212,659
  226,177
  240,248
  254,901
  270,167
Revenue / Adjusted assets
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
Average production assets, $m
  8,982
  11,318
  14,023
  17,110
  20,584
  24,450
  28,704
  33,343
  38,359
  43,745
  49,491
  55,589
  62,032
  68,813
  75,927
  83,370
  91,144
  99,248
  107,686
  116,464
  125,591
  135,077
  144,935
  155,179
  165,826
  176,895
  188,407
  200,384
  212,850
  225,832
  239,357
Working capital, $m
  -1,813
  -120
  -148
  -181
  -217
  -258
  -303
  -352
  -405
  -462
  -523
  -587
  -655
  -727
  -802
  -881
  -963
  -1,049
  -1,138
  -1,230
  -1,327
  -1,427
  -1,531
  -1,639
  -1,752
  -1,869
  -1,990
  -2,117
  -2,249
  -2,386
  -2,529
Total debt, $m
  5,806
  7,593
  9,684
  12,071
  14,757
  17,746
  21,035
  24,622
  28,500
  32,664
  37,107
  41,822
  46,803
  52,046
  57,546
  63,302
  69,312
  75,577
  82,102
  88,889
  95,946
  103,280
  110,902
  118,822
  127,054
  135,613
  144,513
  153,773
  163,412
  173,449
  183,906
Total liabilities, $m
  6,964
  8,751
  10,842
  13,229
  15,915
  18,904
  22,193
  25,780
  29,658
  33,822
  38,265
  42,980
  47,961
  53,204
  58,704
  64,460
  70,470
  76,735
  83,260
  90,047
  97,104
  104,438
  112,060
  119,980
  128,212
  136,771
  145,671
  154,931
  164,570
  174,607
  185,064
Total equity, $m
  3,188
  4,024
  4,986
  6,083
  7,319
  8,693
  10,206
  11,855
  13,638
  15,553
  17,596
  19,765
  22,055
  24,466
  26,995
  29,642
  32,406
  35,287
  38,287
  41,408
  44,654
  48,026
  51,531
  55,173
  58,959
  62,895
  66,987
  71,246
  75,678
  80,294
  85,103
Total liabilities and equity, $m
  10,152
  12,775
  15,828
  19,312
  23,234
  27,597
  32,399
  37,635
  43,296
  49,375
  55,861
  62,745
  70,016
  77,670
  85,699
  94,102
  102,876
  112,022
  121,547
  131,455
  141,758
  152,464
  163,591
  175,153
  187,171
  199,666
  212,658
  226,177
  240,248
  254,901
  270,167
Debt-to-equity ratio
  1.821
  1.890
  1.940
  1.980
  2.020
  2.040
  2.060
  2.080
  2.090
  2.100
  2.110
  2.120
  2.120
  2.130
  2.130
  2.140
  2.140
  2.140
  2.140
  2.150
  2.150
  2.150
  2.150
  2.150
  2.150
  2.160
  2.160
  2.160
  2.160
  2.160
  2.160
Adjusted equity ratio
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315
  0.315

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  450
  654
  806
  977
  1,170
  1,384
  1,618
  1,873
  2,147
  2,441
  2,755
  3,111
  3,461
  3,829
  4,214
  4,617
  5,037
  5,476
  5,932
  6,406
  6,899
  7,411
  7,944
  8,497
  9,072
  9,670
  10,292
  10,939
  11,612
  12,314
  13,045
Depreciation, amort., depletion, $m
  230
  411
  501
  604
  720
  848
  990
  1,145
  1,312
  1,492
  1,683
  1,853
  2,068
  2,294
  2,531
  2,779
  3,038
  3,308
  3,590
  3,882
  4,186
  4,503
  4,831
  5,173
  5,528
  5,897
  6,280
  6,679
  7,095
  7,528
  7,979
Funds from operations, $m
  763
  1,065
  1,306
  1,581
  1,890
  2,232
  2,608
  3,018
  3,459
  3,933
  4,438
  4,964
  5,528
  6,122
  6,745
  7,396
  8,076
  8,784
  9,521
  10,288
  11,085
  11,914
  12,775
  13,670
  14,599
  15,566
  16,572
  17,618
  18,707
  19,842
  21,024
Change in working capital, $m
  -43
  -25
  -29
  -33
  -37
  -41
  -45
  -49
  -53
  -57
  -61
  -64
  -68
  -72
  -75
  -79
  -82
  -86
  -89
  -93
  -96
  -100
  -104
  -108
  -112
  -117
  -122
  -127
  -132
  -137
  -143
Cash from operations, $m
  806
  1,090
  1,335
  1,614
  1,926
  2,273
  2,653
  3,067
  3,512
  3,990
  4,498
  5,028
  5,597
  6,194
  6,820
  7,475
  8,158
  8,870
  9,610
  10,381
  11,182
  12,014
  12,879
  13,778
  14,712
  15,683
  16,693
  17,745
  18,839
  19,979
  21,167
Maintenance CAPEX, $m
  0
  -299
  -377
  -467
  -570
  -686
  -815
  -957
  -1,111
  -1,279
  -1,458
  -1,650
  -1,853
  -2,068
  -2,294
  -2,531
  -2,779
  -3,038
  -3,308
  -3,590
  -3,882
  -4,186
  -4,503
  -4,831
  -5,173
  -5,528
  -5,897
  -6,280
  -6,679
  -7,095
  -7,528
New CAPEX, $m
  -186
  -2,336
  -2,705
  -3,087
  -3,475
  -3,865
  -4,254
  -4,639
  -5,016
  -5,386
  -5,746
  -6,098
  -6,443
  -6,781
  -7,114
  -7,444
  -7,773
  -8,104
  -8,438
  -8,779
  -9,127
  -9,486
  -9,858
  -10,244
  -10,647
  -11,069
  -11,512
  -11,977
  -12,466
  -12,982
  -13,525
Cash from investing activities, $m
  -1,869
  -2,635
  -3,082
  -3,554
  -4,045
  -4,551
  -5,069
  -5,596
  -6,127
  -6,665
  -7,204
  -7,748
  -8,296
  -8,849
  -9,408
  -9,975
  -10,552
  -11,142
  -11,746
  -12,369
  -13,009
  -13,672
  -14,361
  -15,075
  -15,820
  -16,597
  -17,409
  -18,257
  -19,145
  -20,077
  -21,053
Free cash flow, $m
  -1,063
  -1,546
  -1,747
  -1,940
  -2,119
  -2,279
  -2,416
  -2,529
  -2,615
  -2,674
  -2,706
  -2,720
  -2,699
  -2,655
  -2,588
  -2,500
  -2,394
  -2,273
  -2,136
  -1,987
  -1,827
  -1,658
  -1,481
  -1,297
  -1,108
  -913
  -715
  -512
  -307
  -98
  113
Issuance/(repayment) of debt, $m
  979
  1,808
  2,091
  2,386
  2,687
  2,989
  3,289
  3,586
  3,878
  4,164
  4,443
  4,715
  4,981
  5,243
  5,500
  5,755
  6,010
  6,266
  6,524
  6,787
  7,057
  7,334
  7,622
  7,920
  8,232
  8,558
  8,900
  9,260
  9,638
  10,037
  10,457
Issuance/(repurchase) of shares, $m
  600
  182
  156
  120
  65
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,517
  1,990
  2,247
  2,506
  2,752
  2,989
  3,289
  3,586
  3,878
  4,164
  4,443
  4,715
  4,981
  5,243
  5,500
  5,755
  6,010
  6,266
  6,524
  6,787
  7,057
  7,334
  7,622
  7,920
  8,232
  8,558
  8,900
  9,260
  9,638
  10,037
  10,457
Total cash flow (excl. dividends), $m
  451
  444
  500
  566
  633
  710
  873
  1,058
  1,263
  1,490
  1,737
  1,995
  2,282
  2,588
  2,913
  3,255
  3,616
  3,993
  4,388
  4,800
  5,229
  5,676
  6,140
  6,623
  7,124
  7,645
  8,186
  8,748
  9,332
  9,939
  10,571
Retained Cash Flow (-), $m
  -367
  -836
  -962
  -1,097
  -1,235
  -1,374
  -1,513
  -1,649
  -1,783
  -1,915
  -2,043
  -2,168
  -2,291
  -2,411
  -2,529
  -2,647
  -2,764
  -2,881
  -3,000
  -3,121
  -3,245
  -3,373
  -3,505
  -3,642
  -3,786
  -3,936
  -4,093
  -4,258
  -4,432
  -4,616
  -4,809
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -392
  -461
  -531
  -602
  -664
  -639
  -592
  -520
  -425
  -306
  -173
  -9
  177
  383
  609
  852
  1,112
  1,388
  1,679
  1,984
  2,303
  2,636
  2,981
  3,339
  3,709
  4,093
  4,490
  4,900
  5,324
  5,762
Discount rate, %
 
  9.80
  10.29
  10.80
  11.34
  11.91
  12.51
  13.13
  13.79
  14.48
  15.20
  15.96
  16.76
  17.60
  18.48
  19.40
  20.37
  21.39
  22.46
  23.58
  24.76
  26.00
  27.30
  28.67
  30.10
  31.61
  33.19
  34.85
  36.59
  38.42
  40.34
PV of cash for distribution, $m
 
  -357
  -379
  -390
  -392
  -378
  -315
  -249
  -185
  -126
  -74
  -34
  -1
  22
  36
  43
  44
  41
  36
  30
  24
  18
  13
  9
  6
  4
  2
  1
  1
  0
  0
Current shareholders' claim on cash, %
  100
  98.1
  96.9
  96.1
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8
  95.8

Inter Pipeline Ltd. is a petroleum transportation, storage and natural gas liquids processing business. The Company's segments include oil sands transportation business, conventional oil pipelines business, natural gas liquids (NGL) processing business and bulk liquid storage business. The Company geographical segments include Canada and Europe. The oil sands transportation business consists of the Cold Lake, Corridor and Polaris pipeline systems that transport petroleum products and provide related blending and handling services in Alberta. The conventional oil pipelines business involves the transportation, storage and processing of hydrocarbons, as well as midstream marketing blending and handling services. The NGL processing business consists of processing natural gas to extract NGLs and the processing of oil sands upgrader off gas to extract an NGL and olefin mix. The bulk liquid storage business involves the storage and handling of bulk liquid products.

FINANCIAL RATIOS  of  Inter Pipeline Ltd. (IPL)

Valuation Ratios
P/E Ratio 20.8
Price to Sales 5.1
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow 11.6
Price to Free Cash Flow 15.1
Growth Rates
Sales Growth Rate 8.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -45.6%
Cap. Spend. - 3 Yr. Gr. Rate -37.5%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 127.6%
Total Debt to Equity 182.1%
Interest Coverage 5
Management Effectiveness
Return On Assets 5.8%
Ret/ On Assets - 3 Yr. Avg. 5.7%
Return On Total Capital 5.4%
Ret/ On T. Cap. - 3 Yr. Avg. 5.4%
Return On Equity 15%
Return On Equity - 3 Yr. Avg. 15.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 62.8%
Gross Margin - 3 Yr. Avg. 58.6%
EBITDA Margin 54.7%
EBITDA Margin - 3 Yr. Avg. 53.6%
Operating Margin 42.7%
Oper. Margin - 3 Yr. Avg. 41.8%
Pre-Tax Margin 34.5%
Pre-Tax Margin - 3 Yr. Avg. 34.4%
Net Profit Margin 24.7%
Net Profit Margin - 3 Yr. Avg. 23.9%
Effective Tax Rate 24%
Eff/ Tax Rate - 3 Yr. Avg. 25.9%
Payout Ratio 104.4%

IPL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IPL stock intrinsic value calculation we used $1825 million for the last fiscal year's total revenue generated by Inter Pipeline Ltd.. The default revenue input number comes from 2016 income statement of Inter Pipeline Ltd.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our IPL stock valuation model: a) initial revenue growth rate of 26% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.8%, whose default value for IPL is calculated based on our internal credit rating of Inter Pipeline Ltd., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Inter Pipeline Ltd..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of IPL stock the variable cost ratio is equal to 52.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for IPL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Inter Pipeline Ltd..

Corporate tax rate of 27% is the nominal tax rate for Inter Pipeline Ltd.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the IPL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for IPL are equal to 492.2%.

Life of production assets of 40.5 years is the average useful life of capital assets used in Inter Pipeline Ltd. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for IPL is equal to -5.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3188 million for Inter Pipeline Ltd. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 376.873 million for Inter Pipeline Ltd. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Inter Pipeline Ltd. at the current share price and the inputted number of shares is $9.6 billion.

RELATED COMPANIES Price Int.Val. Rating
PPL Pembina Pipeli 43.77 4.12  str.sell
CVE Cenovus Energy 13.04 2.31  str.sell
HSE Husky Energy I 17.77 4.21  str.sell
SU Suncor Energy 47.03 6.75  str.sell
TRP TransCanada Co 59.84 2.93  str.sell
CNQ Canadian Natur 45.05 5.39  str.sell
IMO Imperial Oil L 39.49 35.17  hold
ENB Enbridge Inc. 49.38 46.09  hold
Financial statements of IPL
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.