If You Invested $1000 in Cheniere Energy a Decade Ago, This is How Much It'd Be Worth Now
For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Cheniere Energy (LNG) ten years ago? It may not have been easy to hold on to LNG for all that time, but if you did, how much would your investment be worth today?
Cheniere Energy's Business In-Depth
With that in mind, let's take a look at Cheniere Energy's main business drivers.
Houston, TX-based Cheniere Energy Inc. is primarily engaged in businesses related to liquefied natural gas (or LNG) through its two business segments: LNG terminal; and LNG and natural gas marketing. The company, through its controlling interest in Cheniere Energy Partners L.P., owns and operates the Sabine Pass LNG terminal in Louisiana – North America’s first large-scale liquefied gas export facility. Furthermore, Cheniere Energy owns and operates the 94-mile Creole Trail Pipeline – an interconnect between the Sabine Pass receiving terminal and the downstream markets – through its subsidiary.
Cheniere Energy owns the Sabine Pass LNG facility consisting of six operational trains, with each train having a capacity of about 5 million tons per annum (Mtpa) for a total run-rate of approximately 30 Mtpa. The last of the units, Train 6 was completed last year.
Additionally, Cheniere Energy has a liquefaction and export terminal in Corpus Christi, TX, currently having three operational trains. The complex, which came online in 2019, has an aggregate production capacity of approximately 15 Mtpa of LNG, three LNG storage tanks and two marine berths. Cheniere Energy intends to develop seven midscale liquefaction trains adjacent to the Corpus Christi Liquefaction facility (CCL), which are expected to be completed sometime in 2025. The company has initiated the regulatory approval process regarding same. The total production capacities for these trains are expected to be more than 10 Mtpa.
Cheniere Energy is also involved in LNG and natural gas marketing activities through its subsidiary, Cheniere Marketing LLC.
Global LNG demand is likely to continue growing for the next few years. Cheniere Energy, the U.S.’s only listed LNG export pure play, foresees the fundamentals of LNG to be favorable in the long run, considering the secular shift to the cleaner burning fuel for power generation worldwide and in the Asia-Pacific region in particular. While the increasing demand for gas in the European power sector will be a key factor in the near-term LNG supply rise, the consumption boost is primarily set to come from Asian importers like China, India, South Korea and Pakistan.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Cheniere Energy ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in November 2013 would be worth $4,446.72, or a 344.67% gain, as of November 24, 2023, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
The S&P 500 rose 152.48% and the price of gold increased 53.90% over the same time frame in comparison.
Going forward, analysts are expecting more upside for LNG.
Cheniere Energy, with its first-mover advantage in exporting liquefied natural gas from the United States, is primed for significant revenue and earnings growth on the back of solid operations and long-term contracts. The firm’s gas supply deals for its Sabine Pass and Corpus Christi projects offers excellent cash flow visibility in the coming years. Cheniere’s expanded buyback authorization and dividend hike reflects the dramatic improvement in its fundamentals and transformation from a cash guzzler to a free cash flow generator. However, setting up natural gas liquefaction plants is a costly affair that requires massive capital spending. This has translated into a huge long-term debt burden of more than $23 billion for the company with a debt-to-capitalization of 75.4%. As such, Cheniere Energy stock warrants a cautious stance.
The stock has jumped 5.92% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 5 higher, for fiscal 2023; the consensus estimate has moved up as well.
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Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report
