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ATCO LTD -CLASS I (ACO-X.CA) Stock Fundamental Analysis

TSX:ACO-X - Toronto Stock Exchange - CA0467894006 - Common Stock - Currency: CAD

47.11  -0.59 (-1.24%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to ACO-X. ACO-X was compared to 22 industry peers in the Multi-Utilities industry. ACO-X has only an average score on both its financial health and profitability. ACO-X has a correct valuation and a medium growth rate. Finally ACO-X also has an excellent dividend rating. These ratings would make ACO-X suitable for dividend investing!


Dividend Valuation Growth Profitability Health

6

1. Profitability

1.1 Basic Checks

ACO-X had positive earnings in the past year.
ACO-X had a positive operating cash flow in the past year.
ACO-X had positive earnings in each of the past 5 years.
Each year in the past 5 years ACO-X had a positive operating cash flow.
ACO-X.CA Yearly Net Income VS EBIT VS OCF VS FCFACO-X.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M 1B 1.5B 2B

1.2 Ratios

ACO-X has a Return On Assets (1.49%) which is comparable to the rest of the industry.
ACO-X has a better Return On Equity (8.61%) than 100.00% of its industry peers.
ACO-X's Return On Invested Capital of 3.09% is fine compared to the rest of the industry. ACO-X outperforms 73.68% of its industry peers.
ACO-X had an Average Return On Invested Capital over the past 3 years of 3.80%. This is in line with the industry average of 2.93%.
Industry RankSector Rank
ROA 1.49%
ROE 8.61%
ROIC 3.09%
ROA(3y)1.44%
ROA(5y)1.56%
ROE(3y)8.07%
ROE(5y)8.65%
ROIC(3y)3.8%
ROIC(5y)4.03%
ACO-X.CA Yearly ROA, ROE, ROICACO-X.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2 4 6 8 10

1.3 Margins

ACO-X has a Profit Margin of 8.11%. This is comparable to the rest of the industry: ACO-X outperforms 52.63% of its industry peers.
ACO-X's Profit Margin has improved in the last couple of years.
ACO-X has a better Operating Margin (21.06%) than 73.68% of its industry peers.
In the last couple of years the Operating Margin of ACO-X has grown nicely.
ACO-X has a Gross Margin (78.13%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of ACO-X has declined.
Industry RankSector Rank
OM 21.06%
PM (TTM) 8.11%
GM 78.13%
OM growth 3Y-1.56%
OM growth 5Y1.65%
PM growth 3Y12.56%
PM growth 5Y6.31%
GM growth 3Y-0.33%
GM growth 5Y-2.13%
ACO-X.CA Yearly Profit, Operating, Gross MarginsACO-X.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60 80

5

2. Health

2.1 Basic Checks

ACO-X has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ACO-X has been reduced compared to 1 year ago.
ACO-X has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ACO-X has a worse debt to assets ratio.
ACO-X.CA Yearly Shares OutstandingACO-X.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M 80M 100M
ACO-X.CA Yearly Total Debt VS Total AssetsACO-X.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B 20B 25B

2.2 Solvency

ACO-X has an Altman-Z score of 0.73. This is a bad value and indicates that ACO-X is not financially healthy and even has some risk of bankruptcy.
ACO-X's Altman-Z score of 0.73 is amongst the best of the industry. ACO-X outperforms 89.47% of its industry peers.
ACO-X has a debt to FCF ratio of 21.95. This is a negative value and a sign of low solvency as ACO-X would need 21.95 years to pay back of all of its debts.
ACO-X has a better Debt to FCF ratio (21.95) than 100.00% of its industry peers.
ACO-X has a Debt/Equity ratio of 2.57. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ACO-X (2.57) is worse than 63.16% of its industry peers.
Industry RankSector Rank
Debt/Equity 2.57
Debt/FCF 21.95
Altman-Z 0.73
ROIC/WACC0.63
WACC4.92%
ACO-X.CA Yearly LT Debt VS Equity VS FCFACO-X.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2B 4B 6B 8B 10B

2.3 Liquidity

ACO-X has a Current Ratio of 1.75. This is a normal value and indicates that ACO-X is financially healthy and should not expect problems in meeting its short term obligations.
With an excellent Current ratio value of 1.75, ACO-X belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
A Quick Ratio of 1.60 indicates that ACO-X should not have too much problems paying its short term obligations.
ACO-X has a Quick ratio of 1.60. This is amongst the best in the industry. ACO-X outperforms 100.00% of its industry peers.
Industry RankSector Rank
Current Ratio 1.75
Quick Ratio 1.6
ACO-X.CA Yearly Current Assets VS Current LiabilitesACO-X.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

4

3. Growth

3.1 Past

ACO-X shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.57%, which is quite good.
ACO-X shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.27% yearly.
Looking at the last year, ACO-X shows a decrease in Revenue. The Revenue has decreased by -1.95% in the last year.
ACO-X shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.61% yearly.
EPS 1Y (TTM)12.57%
EPS 3Y7.44%
EPS 5Y4.27%
EPS Q2Q%14.08%
Revenue 1Y (TTM)-1.95%
Revenue growth 3Y6.33%
Revenue growth 5Y-0.61%
Sales Q2Q%5.48%

3.2 Future

Based on estimates for the next years, ACO-X will show a small growth in Earnings Per Share. The EPS will grow by 5.67% on average per year.
Based on estimates for the next years, ACO-X will show a small growth in Revenue. The Revenue will grow by 2.94% on average per year.
EPS Next Y13.46%
EPS Next 2Y6.7%
EPS Next 3Y5.67%
EPS Next 5YN/A
Revenue Next Year5.95%
Revenue Next 2Y2.87%
Revenue Next 3Y2.94%
Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
ACO-X.CA Yearly Revenue VS EstimatesACO-X.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1B 2B 3B 4B 5B
ACO-X.CA Yearly EPS VS EstimatesACO-X.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1 2 3 4

6

4. Valuation

4.1 Price/Earnings Ratio

ACO-X is valuated reasonably with a Price/Earnings ratio of 11.43.
Compared to the rest of the industry, the Price/Earnings ratio of ACO-X is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 30.19. ACO-X is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 10.83, the valuation of ACO-X can be described as reasonable.
The rest of the industry has a similar Price/Forward Earnings ratio as ACO-X.
When comparing the Price/Forward Earnings ratio of ACO-X to the average of the S&P500 Index (23.58), we can say ACO-X is valued rather cheaply.
Industry RankSector Rank
PE 11.43
Fwd PE 10.83
ACO-X.CA Price Earnings VS Forward Price EarningsACO-X.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ACO-X is valued a bit cheaper than the industry average as 73.68% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ACO-X indicates a somewhat cheap valuation: ACO-X is cheaper than 63.16% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 9.96
EV/EBITDA 8.71
ACO-X.CA Per share dataACO-X.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40

4.3 Compensation for Growth

ACO-X's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of ACO-X may justify a higher PE ratio.
PEG (NY)0.85
PEG (5Y)2.68
EPS Next 2Y6.7%
EPS Next 3Y5.67%

7

5. Dividend

5.1 Amount

ACO-X has a Yearly Dividend Yield of 4.23%, which is a nice return.
With a Dividend Yield of 4.23, ACO-X pays less dividend than the industry average, which is at 5.33. 94.74% of the companies listed in the same industry pay a better dividend than ACO-X!
ACO-X's Dividend Yield is rather good when compared to the S&P500 average which is at 2.30.
Industry RankSector Rank
Dividend Yield 4.23%

5.2 History

The dividend of ACO-X has a limited annual growth rate of 4.80%.
ACO-X has been paying a dividend for at least 10 years, so it has a reliable track record.
ACO-X has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.8%
Div Incr Years31
Div Non Decr Years34
ACO-X.CA Yearly Dividends per shareACO-X.CA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5

5.3 Sustainability

56.33% of the earnings are spent on dividend by ACO-X. This is a bit on the high side, but may be sustainable.
ACO-X's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP56.33%
EPS Next 2Y6.7%
EPS Next 3Y5.67%
ACO-X.CA Yearly Income VS Free CF VS DividendACO-X.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M 400M 600M 800M
ACO-X.CA Dividend Payout.ACO-X.CA Dividend Payout, showing the Payout Ratio.ACO-X.CA Dividend Payout.PayoutRetained Earnings

ATCO LTD -CLASS I

TSX:ACO-X (2/14/2025, 7:00:00 PM)

47.11

-0.59 (-1.24%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryMulti-Utilities
Earnings (Last)11-14 2024-11-14/bmo
Earnings (Next)02-27 2025-02-27/amc
Inst Owners28.11%
Inst Owner ChangeN/A
Ins Owners0.64%
Ins Owner ChangeN/A
Market Cap5.29B
Analysts80
Price Target52.11 (10.61%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 4.23%
Yearly Dividend1.9
Dividend Growth(5Y)4.8%
DP56.33%
Div Incr Years31
Div Non Decr Years34
Ex-Date02-27 2025-02-27 (0.5045)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.23%
Min EPS beat(2)5.69%
Max EPS beat(2)10.76%
EPS beat(4)4
Avg EPS beat(4)6.52%
Min EPS beat(4)1.44%
Max EPS beat(4)10.76%
EPS beat(8)6
Avg EPS beat(8)2.88%
EPS beat(12)9
Avg EPS beat(12)4.68%
EPS beat(16)13
Avg EPS beat(16)6.83%
Revenue beat(2)0
Avg Revenue beat(2)-12.19%
Min Revenue beat(2)-18.95%
Max Revenue beat(2)-5.42%
Revenue beat(4)0
Avg Revenue beat(4)-14.09%
Min Revenue beat(4)-26.13%
Max Revenue beat(4)-5.42%
Revenue beat(8)0
Avg Revenue beat(8)-10.57%
Revenue beat(12)1
Avg Revenue beat(12)-9.1%
Revenue beat(16)2
Avg Revenue beat(16)-8.75%
PT rev (1m)0.66%
PT rev (3m)5.15%
EPS NQ rev (1m)0.88%
EPS NQ rev (3m)7.06%
EPS NY rev (1m)0.14%
EPS NY rev (3m)2.68%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.05%
Valuation
Industry RankSector Rank
PE 11.43
Fwd PE 10.83
P/S 1.11
P/FCF 9.96
P/OCF 2.46
P/B 1.18
P/tB 1.66
EV/EBITDA 8.71
EPS(TTM)4.12
EY8.75%
EPS(NY)4.35
Fwd EY9.23%
FCF(TTM)4.73
FCFY10.04%
OCF(TTM)19.12
OCFY40.59%
SpS42.52
BVpS40.07
TBVpS28.43
PEG (NY)0.85
PEG (5Y)2.68
Profitability
Industry RankSector Rank
ROA 1.49%
ROE 8.61%
ROCE 4.02%
ROIC 3.09%
ROICexc 3.17%
ROICexgc 3.35%
OM 21.06%
PM (TTM) 8.11%
GM 78.13%
FCFM 11.13%
ROA(3y)1.44%
ROA(5y)1.56%
ROE(3y)8.07%
ROE(5y)8.65%
ROIC(3y)3.8%
ROIC(5y)4.03%
ROICexc(3y)3.96%
ROICexc(5y)4.21%
ROICexgc(3y)4.15%
ROICexgc(5y)4.4%
ROCE(3y)4.95%
ROCE(5y)5.24%
ROICexcg growth 3Y0.35%
ROICexcg growth 5Y-0.4%
ROICexc growth 3Y-0.23%
ROICexc growth 5Y-0.8%
OM growth 3Y-1.56%
OM growth 5Y1.65%
PM growth 3Y12.56%
PM growth 5Y6.31%
GM growth 3Y-0.33%
GM growth 5Y-2.13%
F-Score6
Asset Turnover0.18
Health
Industry RankSector Rank
Debt/Equity 2.57
Debt/FCF 21.95
Debt/EBITDA 6.29
Cap/Depr 193.18%
Cap/Sales 33.84%
Interest Coverage 1.79
Cash Conversion 116.57%
Profit Quality 137.21%
Current Ratio 1.75
Quick Ratio 1.6
Altman-Z 0.73
F-Score6
WACC4.92%
ROIC/WACC0.63
Cap/Depr(3y)200.49%
Cap/Depr(5y)188.77%
Cap/Sales(3y)32.06%
Cap/Sales(5y)29.56%
Profit Quality(3y)174.3%
Profit Quality(5y)182.52%
High Growth Momentum
Growth
EPS 1Y (TTM)12.57%
EPS 3Y7.44%
EPS 5Y4.27%
EPS Q2Q%14.08%
EPS Next Y13.46%
EPS Next 2Y6.7%
EPS Next 3Y5.67%
EPS Next 5YN/A
Revenue 1Y (TTM)-1.95%
Revenue growth 3Y6.33%
Revenue growth 5Y-0.61%
Sales Q2Q%5.48%
Revenue Next Year5.95%
Revenue Next 2Y2.87%
Revenue Next 3Y2.94%
Revenue Next 5YN/A
EBIT growth 1Y-23.75%
EBIT growth 3Y4.67%
EBIT growth 5Y1.03%
EBIT Next Year458.66%
EBIT Next 3Y85.57%
EBIT Next 5YN/A
FCF growth 1Y-36.94%
FCF growth 3Y-21.12%
FCF growth 5YN/A
OCF growth 1Y-4.28%
OCF growth 3Y2.16%
OCF growth 5Y14.49%