ALTAGAS LTD (ALA.CA) Stock Fundamental Analysis
TSX:ALA - Toronto Stock Exchange - CA0213611001 - Common Stock - Currency: CAD
We assign a fundamental rating of 3 out of 10 to ALA. ALA was compared to 8 industry peers in the Gas Utilities industry. ALA has a medium profitability rating, but doesn't score so well on its financial health evaluation. ALA is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
ALA had positive earnings in the past year.
ALA had a positive operating cash flow in the past year.
In the past 5 years ALA has always been profitable.
Each year in the past 5 years ALA had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.15%, ALA is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
ALA has a Return On Equity of 6.18%. This is in the better half of the industry: ALA outperforms 62.50% of its industry peers.
ALA has a worse Return On Invested Capital (3.44%) than 75.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ALA is in line with the industry average of 4.53%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.15% | ||
| ROE | 6.18% | ||
| ROIC | 3.44% |
ROA(3y)2.2%
ROA(5y)1.99%
ROE(3y)6.76%
ROE(5y)6.1%
ROIC(3y)3.44%
ROIC(5y)3.31%
1.3 Margins
The Profit Margin of ALA (4.40%) is better than 62.50% of its industry peers.
In the last couple of years the Profit Margin of ALA has declined.
ALA has a Operating Margin of 7.97%. This is in the lower half of the industry: ALA underperforms 75.00% of its industry peers.
ALA's Operating Margin has improved in the last couple of years.
ALA's Gross Margin of 25.65% is on the low side compared to the rest of the industry. ALA is outperformed by 62.50% of its industry peers.
In the last couple of years the Gross Margin of ALA has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.97% | ||
| PM (TTM) | 4.4% | ||
| GM | 25.65% |
OM growth 3Y-1.16%
OM growth 5Y32.51%
PM growth 3Y28.76%
PM growth 5Y-19.79%
GM growth 3Y-1.26%
GM growth 5Y-8.77%
2. Health
2.1 Basic Checks
ALA has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ALA has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, ALA has more shares outstanding
Compared to 1 year ago, ALA has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.99, we must say that ALA is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.99, ALA belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Debt to FCF ratio of ALA is 68.55, which is on the high side as it means it would take ALA, 68.55 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ALA (68.55) is worse than 75.00% of its industry peers.
ALA has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
ALA's Debt to Equity ratio of 1.02 is in line compared to the rest of the industry. ALA outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 68.55 | ||
| Altman-Z | 0.99 |
ROIC/WACC0.6
WACC5.77%
2.3 Liquidity
A Current Ratio of 0.95 indicates that ALA may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.95, ALA is in line with its industry, outperforming 50.00% of the companies in the same industry.
A Quick Ratio of 0.78 indicates that ALA may have some problems paying its short term obligations.
With a Quick ratio value of 0.78, ALA is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
ALA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.34%.
ALA shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.25% yearly.
The Revenue has been growing slightly by 1.25% in the past year.
The Revenue has been growing by 17.77% on average over the past years. This is quite good.
EPS 1Y (TTM)6.34%
EPS 3Y7.19%
EPS 5Y13.25%
EPS Q2Q%0%
Revenue 1Y (TTM)1.25%
Revenue growth 3Y5.59%
Revenue growth 5Y17.77%
Sales Q2Q%8.59%
3.2 Future
Based on estimates for the next years, ALA will show a small growth in Earnings Per Share. The EPS will grow by 2.55% on average per year.
ALA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.25% yearly.
EPS Next Y3.64%
EPS Next 2Y5.73%
EPS Next 3Y8.15%
EPS Next 5Y2.55%
Revenue Next Year2.66%
Revenue Next 2Y5.32%
Revenue Next 3Y5.25%
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 decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ALA is valuated rather expensively with a Price/Earnings ratio of 17.39.
Compared to the rest of the industry, the Price/Earnings ratio of ALA indicates a somewhat cheap valuation: ALA is cheaper than 62.50% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.82, ALA is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 15.56, the valuation of ALA can be described as correct.
62.50% of the companies in the same industry are cheaper than ALA, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.76. ALA is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.39 | ||
| Fwd PE | 15.56 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ALA indicates a slightly more expensive valuation: ALA is more expensive than 75.00% of the companies listed in the same industry.
ALA's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. ALA is more expensive than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 78.68 | ||
| EV/EBITDA | 13.96 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ALA does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)4.78
PEG (5Y)1.31
EPS Next 2Y5.73%
EPS Next 3Y8.15%
5. Dividend
5.1 Amount
ALA has a Yearly Dividend Yield of 3.31%. Purely for dividend investing, there may be better candidates out there.
ALA's Dividend Yield is rather good when compared to the industry average which is at 3.36. ALA pays more dividend than 87.50% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, ALA pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.31% |
5.2 History
The dividend of ALA has a limited annual growth rate of 0.74%.
ALA has paid a dividend for at least 10 years, which is a reliable track record.
ALA has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)0.74%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
ALA pays out 67.26% of its income as dividend. This is not a sustainable payout ratio.
The dividend of ALA is growing, but earnings are growing more, so the dividend growth is sustainable.
DP67.26%
EPS Next 2Y5.73%
EPS Next 3Y8.15%
TSX:ALA (5/23/2025, 7:00:00 PM)
37.91
+0.28 (+0.74%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryGas Utilities
Earnings (Last)
Earnings (Next)
Inst Owners35.93%
Inst Owner ChangeN/A
Ins Owners0.62%
Ins Owner ChangeN/A
Market Cap11.33B
Analysts75.71
Price Target42.16 (11.21%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.31% |
Yearly Dividend1.25
Dividend Growth(5Y)0.74%
DP67.26%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.83%
Min EPS beat(2)-0.52%
Max EPS beat(2)6.18%
EPS beat(4)3
Avg EPS beat(4)20.88%
Min EPS beat(4)-0.52%
Max EPS beat(4)54.51%
EPS beat(8)5
Avg EPS beat(8)9.34%
EPS beat(12)7
Avg EPS beat(12)4.91%
EPS beat(16)10
Avg EPS beat(16)253.91%
Revenue beat(2)1
Avg Revenue beat(2)0.91%
Min Revenue beat(2)-6.22%
Max Revenue beat(2)8.03%
Revenue beat(4)2
Avg Revenue beat(4)-1.04%
Min Revenue beat(4)-14.32%
Max Revenue beat(4)8.36%
Revenue beat(8)2
Avg Revenue beat(8)-8.16%
Revenue beat(12)5
Avg Revenue beat(12)20.24%
Revenue beat(16)9
Avg Revenue beat(16)46.06%
PT rev (1m)4.79%
PT rev (3m)7.36%
EPS NQ rev (1m)3.98%
EPS NQ rev (3m)25.2%
EPS NY rev (1m)0%
EPS NY rev (3m)0.32%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-3.48%
Revenue NY rev (3m)-3.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.39 | ||
| Fwd PE | 15.56 | ||
| P/S | 0.89 | ||
| P/FCF | 78.68 | ||
| P/OCF | 7.05 | ||
| P/B | 1.25 | ||
| P/tB | 3.43 | ||
| EV/EBITDA | 13.96 |
EPS(TTM)2.18
EY5.75%
EPS(NY)2.44
Fwd EY6.43%
FCF(TTM)0.48
FCFY1.27%
OCF(TTM)5.38
OCFY14.19%
SpS42.7
BVpS30.43
TBVpS11.06
PEG (NY)4.78
PEG (5Y)1.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.15% | ||
| ROE | 6.18% | ||
| ROCE | 4.38% | ||
| ROIC | 3.44% | ||
| ROICexc | 3.47% | ||
| ROICexgc | 4.64% | ||
| OM | 7.97% | ||
| PM (TTM) | 4.4% | ||
| GM | 25.65% | ||
| FCFM | 1.13% |
ROA(3y)2.2%
ROA(5y)1.99%
ROE(3y)6.76%
ROE(5y)6.1%
ROIC(3y)3.44%
ROIC(5y)3.31%
ROICexc(3y)3.46%
ROICexc(5y)3.32%
ROICexgc(3y)4.67%
ROICexgc(5y)4.54%
ROCE(3y)4.43%
ROCE(5y)4.26%
ROICexcg growth 3Y-2.78%
ROICexcg growth 5Y46.91%
ROICexc growth 3Y-1.67%
ROICexc growth 5Y47.33%
OM growth 3Y-1.16%
OM growth 5Y32.51%
PM growth 3Y28.76%
PM growth 5Y-19.79%
GM growth 3Y-1.26%
GM growth 5Y-8.77%
F-Score5
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 68.55 | ||
| Debt/EBITDA | 6.18 | ||
| Cap/Depr | 300.62% | ||
| Cap/Sales | 11.47% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 106.92% | ||
| Profit Quality | 25.62% | ||
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z | 0.99 |
F-Score5
WACC5.77%
ROIC/WACC0.6
Cap/Depr(3y)241.49%
Cap/Depr(5y)224.2%
Cap/Sales(3y)8.4%
Cap/Sales(5y)9.6%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)6.34%
EPS 3Y7.19%
EPS 5Y13.25%
EPS Q2Q%0%
EPS Next Y3.64%
EPS Next 2Y5.73%
EPS Next 3Y8.15%
EPS Next 5Y2.55%
Revenue 1Y (TTM)1.25%
Revenue growth 3Y5.59%
Revenue growth 5Y17.77%
Sales Q2Q%8.59%
Revenue Next Year2.66%
Revenue Next 2Y5.32%
Revenue Next 3Y5.25%
Revenue Next 5YN/A
EBIT growth 1Y-5.4%
EBIT growth 3Y4.37%
EBIT growth 5Y56.06%
EBIT Next Year42.74%
EBIT Next 3Y16.7%
EBIT Next 5Y12.5%
FCF growth 1Y126.92%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y260.54%
OCF growth 3Y27.73%
OCF growth 5Y19.91%