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ALTAGAS LTD (ALA.CA) Stock Fundamental Analysis

TSX:ALA - Toronto Stock Exchange - CA0213611001 - Common Stock - Currency: CAD

34.85  -0.05 (-0.14%)

Fundamental Rating

4

Overall ALA gets a fundamental rating of 4 out of 10. We evaluated ALA against 8 industry peers in the Gas Utilities industry. While ALA is still in line with the averages on profitability rating, there are concerns on its financial health. ALA is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

4

1. Profitability

1.1 Basic Checks

ALA had positive earnings in the past year.
In the past year ALA had a positive cash flow from operations.
In the past 5 years ALA has always been profitable.
ALA had a positive operating cash flow in each of the past 5 years.
ALA.CA Yearly Net Income VS EBIT VS OCF VS FCFALA.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 -500M 1B -1B

1.2 Ratios

ALA has a better Return On Assets (1.97%) than 62.50% of its industry peers.
ALA has a better Return On Equity (6.08%) than 62.50% of its industry peers.
With a Return On Invested Capital value of 3.28%, ALA is not doing good in the industry: 75.00% of the companies in the same industry are doing better.
The Average Return On Invested Capital over the past 3 years for ALA is below the industry average of 7.01%.
Industry RankSector Rank
ROA 1.97%
ROE 6.08%
ROIC 3.28%
ROA(3y)1.82%
ROA(5y)2.32%
ROE(3y)5.66%
ROE(5y)6.91%
ROIC(3y)3.47%
ROIC(5y)2.68%
ALA.CA Yearly ROA, ROE, ROICALA.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5 -5 10

1.3 Margins

Looking at the Profit Margin, with a value of 3.91%, ALA is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
ALA's Profit Margin has declined in the last couple of years.
ALA has a Operating Margin of 7.47%. This is in the lower half of the industry: ALA underperforms 75.00% of its industry peers.
ALA's Operating Margin has declined in the last couple of years.
ALA has a Gross Margin of 24.89%. This is in the lower half of the industry: ALA underperforms 75.00% of its industry peers.
ALA's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 7.47%
PM (TTM) 3.91%
GM 24.89%
OM growth 3Y-15.76%
OM growth 5YN/A
PM growth 3Y-17.23%
PM growth 5YN/A
GM growth 3Y-19.85%
GM growth 5Y-12.11%
ALA.CA Yearly Profit, Operating, Gross MarginsALA.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 40

2

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALA is destroying value.
Compared to 1 year ago, ALA has more shares outstanding
ALA has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ALA has been reduced compared to a year ago.
ALA.CA Yearly Shares OutstandingALA.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M
ALA.CA Yearly Total Debt VS Total AssetsALA.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

2.2 Solvency

Based on the Altman-Z score of 0.97, we must say that ALA is in the distress zone and has some risk of bankruptcy.
ALA has a better Altman-Z score (0.97) than 100.00% of its industry peers.
A Debt/Equity ratio of 1.22 is on the high side and indicates that ALA has dependencies on debt financing.
The Debt to Equity ratio of ALA (1.22) is worse than 62.50% of its industry peers.
Industry RankSector Rank
Debt/Equity 1.22
Debt/FCF N/A
Altman-Z 0.97
ROIC/WACC0.6
WACC5.5%
ALA.CA Yearly LT Debt VS Equity VS FCFALA.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

2.3 Liquidity

A Current Ratio of 1.03 indicates that ALA should not have too much problems paying its short term obligations.
The Current ratio of ALA (1.03) is comparable to the rest of the industry.
ALA has a Quick Ratio of 1.03. This is a bad value and indicates that ALA is not financially healthy enough and could expect problems in meeting its short term obligations.
ALA has a Quick ratio (0.79) which is in line with its industry peers.
Industry RankSector Rank
Current Ratio 1.03
Quick Ratio 0.79
ALA.CA Yearly Current Assets VS Current LiabilitesALA.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B

5

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 22.60% over the past year.
Measured over the past years, ALA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.00% on average per year.
Looking at the last year, ALA shows a decrease in Revenue. The Revenue has decreased by -8.30% in the last year.
ALA shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 25.01% yearly.
EPS 1Y (TTM)22.6%
EPS 3Y10%
EPS 5Y16%
EPS Q2Q%40%
Revenue 1Y (TTM)-8.3%
Revenue growth 3Y32.5%
Revenue growth 5Y25.01%
Sales Q2Q%-8.94%

3.2 Future

ALA is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.91% yearly.
ALA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.12% yearly.
EPS Next Y13.76%
EPS Next 2Y9.16%
EPS Next 3Y9.4%
EPS Next 5Y8.91%
Revenue Next Year-10.81%
Revenue Next 2Y-2.57%
Revenue Next 3Y0.12%
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
ALA.CA Yearly Revenue VS EstimatesALA.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5B 10B
ALA.CA Yearly EPS VS EstimatesALA.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0.5 1 1.5 2 2.5

3

4. Valuation

4.1 Price/Earnings Ratio

ALA is valuated correctly with a Price/Earnings ratio of 16.06.
ALA's Price/Earnings ratio is a bit cheaper when compared to the industry. ALA is cheaper than 62.50% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.12, ALA is valued a bit cheaper.
The Price/Forward Earnings ratio is 15.47, which indicates a correct valuation of ALA.
ALA's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 94.77. ALA is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 16.06
Fwd PE 15.47
ALA.CA Price Earnings VS Forward Price EarningsALA.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALA indicates a rather expensive valuation: ALA more expensive than 87.50% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 14.12
ALA.CA Per share dataALA.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20 30 40

4.3 Compensation for Growth

ALA's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.17
PEG (5Y)1
EPS Next 2Y9.16%
EPS Next 3Y9.4%

5

5. Dividend

5.1 Amount

ALA has a Yearly Dividend Yield of 3.73%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.55, ALA pays a better dividend. On top of this ALA pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, ALA pays a better dividend.
Industry RankSector Rank
Dividend Yield 3.73%

5.2 History

The dividend of ALA decreases each year by -13.07%.
ALA has paid a dividend for at least 10 years, which is a reliable track record.
As ALA did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)-13.07%
Div Incr Years5
Div Non Decr Years5
ALA.CA Yearly Dividends per shareALA.CA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5 2

5.3 Sustainability

74.59% of the earnings are spent on dividend by ALA. This is not a sustainable payout ratio.
DP74.59%
EPS Next 2Y9.16%
EPS Next 3Y9.4%
ALA.CA Yearly Income VS Free CF VS DividendALA.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 500M -500M -1B
ALA.CA Dividend Payout.ALA.CA Dividend Payout, showing the Payout Ratio.ALA.CA Dividend Payout.PayoutRetained Earnings

ALTAGAS LTD

TSX:ALA (2/7/2025, 7:00:00 PM)

34.85

-0.05 (-0.14%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryGas Utilities
Earnings (Last)10-31 2024-10-31/bmo
Earnings (Next)02-27 2025-02-27/amc
Inst Owners35%
Inst Owner ChangeN/A
Ins Owners0.62%
Ins Owner ChangeN/A
Market Cap10.38B
Analysts77.14
Price Target39.17 (12.4%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 3.73%
Yearly Dividend1.19
Dividend Growth(5Y)-13.07%
DP74.59%
Div Incr Years5
Div Non Decr Years5
Ex-Date03-17 2025-03-17 (0.315)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)38.93%
Min EPS beat(2)23.34%
Max EPS beat(2)54.51%
EPS beat(4)3
Avg EPS beat(4)20.62%
Min EPS beat(4)-3.56%
Max EPS beat(4)54.51%
EPS beat(8)5
Avg EPS beat(8)9.05%
EPS beat(12)7
Avg EPS beat(12)5.04%
EPS beat(16)11
Avg EPS beat(16)256.84%
Revenue beat(2)1
Avg Revenue beat(2)-2.98%
Min Revenue beat(2)-14.32%
Max Revenue beat(2)8.36%
Revenue beat(4)1
Avg Revenue beat(4)-9.76%
Min Revenue beat(4)-20.81%
Max Revenue beat(4)8.36%
Revenue beat(8)2
Avg Revenue beat(8)1.48%
Revenue beat(12)6
Avg Revenue beat(12)32.67%
Revenue beat(16)10
Avg Revenue beat(16)50.12%
PT rev (1m)1.05%
PT rev (3m)0.39%
EPS NQ rev (1m)-0.98%
EPS NQ rev (3m)-10.72%
EPS NY rev (1m)-1.45%
EPS NY rev (3m)0.95%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-5.21%
Valuation
Industry RankSector Rank
PE 16.06
Fwd PE 15.47
P/S 0.83
P/FCF N/A
P/OCF 8.77
P/B 1.29
P/tB 4.09
EV/EBITDA 14.12
EPS(TTM)2.17
EY6.23%
EPS(NY)2.25
Fwd EY6.46%
FCF(TTM)-0.24
FCFYN/A
OCF(TTM)3.98
OCFY11.41%
SpS41.89
BVpS26.94
TBVpS8.52
PEG (NY)1.17
PEG (5Y)1
Profitability
Industry RankSector Rank
ROA 1.97%
ROE 6.08%
ROCE 4.29%
ROIC 3.28%
ROICexc 3.4%
ROICexgc 4.57%
OM 7.47%
PM (TTM) 3.91%
GM 24.89%
FCFM N/A
ROA(3y)1.82%
ROA(5y)2.32%
ROE(3y)5.66%
ROE(5y)6.91%
ROIC(3y)3.47%
ROIC(5y)2.68%
ROICexc(3y)3.48%
ROICexc(5y)2.69%
ROICexgc(3y)4.77%
ROICexgc(5y)3.7%
ROCE(3y)4.51%
ROCE(5y)3.48%
ROICexcg growth 3Y8.69%
ROICexcg growth 5YN/A
ROICexc growth 3Y9.85%
ROICexc growth 5YN/A
OM growth 3Y-15.76%
OM growth 5YN/A
PM growth 3Y-17.23%
PM growth 5YN/A
GM growth 3Y-19.85%
GM growth 5Y-12.11%
F-Score6
Asset Turnover0.5
Health
Industry RankSector Rank
Debt/Equity 1.22
Debt/FCF N/A
Debt/EBITDA 7.03
Cap/Depr 271.86%
Cap/Sales 10.07%
Interest Coverage 250
Cash Conversion 84.94%
Profit Quality N/A
Current Ratio 1.03
Quick Ratio 0.79
Altman-Z 0.97
F-Score6
WACC5.5%
ROIC/WACC0.6
Cap/Depr(3y)208.32%
Cap/Depr(5y)226.65%
Cap/Sales(3y)7.25%
Cap/Sales(5y)12.23%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)22.6%
EPS 3Y10%
EPS 5Y16%
EPS Q2Q%40%
EPS Next Y13.76%
EPS Next 2Y9.16%
EPS Next 3Y9.4%
EPS Next 5Y8.91%
Revenue 1Y (TTM)-8.3%
Revenue growth 3Y32.5%
Revenue growth 5Y25.01%
Sales Q2Q%-8.94%
Revenue Next Year-10.81%
Revenue Next 2Y-2.57%
Revenue Next 3Y0.12%
Revenue Next 5YN/A
EBIT growth 1Y16.35%
EBIT growth 3Y11.63%
EBIT growth 5YN/A
EBIT Next Year30.54%
EBIT Next 3Y12.65%
EBIT Next 5Y8.88%
FCF growth 1Y62.69%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y76.98%
OCF growth 3Y13.19%
OCF growth 5YN/A