Q: I see that Gibson Energy (GEI) missed estimates. Q3 Revenue of $2,900 million in the third quarter, a $325 million or 10% decrease relative to the third quarter of 2023, What are your thoughts on GEI going forward. Would KEY be a better alternative? Thanks for all that 5i does. Steve
5i Research Answer:
KEY is larger, a bit more expensive on valuation but we would consider 'better' overall. We would, however, not consider GEI 'bad'. Revenue did fall, but this was due to the marketing division and this is always volatile. The EPS miss was minor (less than 2%). The stock offers a higher than average yield of 7.1% and a better-than-peer valuation of 17X earnings. Payout ratio is fine at 65%.