ALGONQUIN POWER & UTILITIES (AQN.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:AQN - CA0158571053 - Common Stock
8.74 CAD
-0.08 (-0.91%)
Overall AQN gets a fundamental rating of 3 out of 10. We evaluated AQN against 19 industry peers in the Multi-Utilities industry. AQN may be in some trouble as it scores bad on both profitability and health. AQN is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- AQN had positive earnings in the past year.
- In the past year AQN had a positive cash flow from operations.
- The reported net income has been mixed in the past 5 years: AQN reported negative net income in multiple years.
- Each year in the past 5 years AQN had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of -0.27%, AQN is doing worse than 78.95% of the companies in the same industry.
- AQN has a worse Return On Equity (-0.80%) than 78.95% of its industry peers.
- The Return On Invested Capital of AQN (2.88%) is worse than 78.95% of its industry peers.
- AQN had an Average Return On Invested Capital over the past 3 years of 2.15%. This is in line with the industry average of 3.73%.
- The 3 year average ROIC (2.15%) for AQN is below the current ROIC(2.88%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.27% | ||
| ROE | -0.8% | ||
| ROIC | 2.88% |
ROA(3y)-3.11%
ROA(5y)-0.39%
ROE(3y)-11.12%
ROE(5y)-2.83%
ROIC(3y)2.15%
ROIC(5y)2.11%
1.3 Margins
- Looking at the Operating Margin, with a value of 21.55%, AQN is doing worse than 78.95% of the companies in the same industry.
- In the last couple of years the Operating Margin of AQN has declined.
- Looking at the Gross Margin, with a value of 73.94%, AQN is doing worse than 63.16% of the companies in the same industry.
- In the last couple of years the Gross Margin of AQN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.55% | ||
| PM (TTM) | N/A | ||
| GM | 73.94% |
OM growth 3Y3.93%
OM growth 5Y-3.09%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y1.98%
GM growth 5Y0.16%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AQN is destroying value.
- The number of shares outstanding for AQN has been increased compared to 1 year ago.
- AQN has more shares outstanding than it did 5 years ago.
- AQN has a better debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 0.34, we must say that AQN is in the distress zone and has some risk of bankruptcy.
- The Altman-Z score of AQN (0.34) is worse than 78.95% of its industry peers.
- AQN has a Debt/Equity ratio of 1.33. This is a high value indicating a heavy dependency on external financing.
- AQN's Debt to Equity ratio of 1.33 is amongst the best of the industry. AQN outperforms 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.33 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 0.34 |
ROIC/WACC0.49
WACC5.94%
2.3 Liquidity
- A Current Ratio of 1.23 indicates that AQN should not have too much problems paying its short term obligations.
- With a Current ratio value of 1.23, AQN perfoms like the industry average, outperforming 47.37% of the companies in the same industry.
- AQN has a Quick Ratio of 1.03. This is a normal value and indicates that AQN is financially healthy and should not expect problems in meeting its short term obligations.
- AQN has a Quick ratio (1.03) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.23 | ||
| Quick Ratio | 1.03 |
3. Growth
3.1 Past
- The earnings per share for AQN have decreased strongly by -29.79% in the last year.
- AQN shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -10.38% yearly.
- The Revenue for AQN has decreased by -23.92% in the past year. This is quite bad
- The Revenue has been growing slightly by 7.38% on average over the past years.
EPS 1Y (TTM)-29.79%
EPS 3Y-19.53%
EPS 5Y-10.38%
EPS Q2Q%12.5%
Revenue 1Y (TTM)-23.92%
Revenue growth 3Y0.49%
Revenue growth 5Y7.38%
Sales Q2Q%1.66%
3.2 Future
- Based on estimates for the next years, AQN will show a small growth in Earnings Per Share. The EPS will grow by 4.09% on average per year.
- The Revenue is expected to grow by 2.30% on average over the next years.
EPS Next Y-12.26%
EPS Next 2Y-0.48%
EPS Next 3Y6.43%
EPS Next 5Y4.09%
Revenue Next Year-9.53%
Revenue Next 2Y-3.01%
Revenue Next 3Y-0.37%
Revenue Next 5Y2.3%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better 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.
4. Valuation
4.1 Price/Earnings Ratio
- AQN is valuated rather expensively with a Price/Earnings ratio of 19.42.
- AQN's Price/Earnings ratio is a bit more expensive when compared to the industry. AQN is more expensive than 63.16% of the companies in the same industry.
- AQN is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 17.33, AQN is valued on the expensive side.
- AQN's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. AQN is more expensive than 63.16% of the companies in the same industry.
- AQN's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.42 | ||
| Fwd PE | 17.33 |
4.2 Price Multiples
- AQN's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. AQN is more expensive than 78.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.35 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-0.48%
EPS Next 3Y6.43%
5. Dividend
5.1 Amount
- AQN has a Yearly Dividend Yield of 6.58%, which is a nice return.
- AQN's Dividend Yield is a higher than the industry average which is at 5.19.
- AQN's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.58% |
5.2 History
- The dividend of AQN has a limited annual growth rate of 0.06%.
- AQN has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)0.06%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- AQN has negative earnings and hence a negative payout ratio. The dividend may be in danger.
- The dividend of AQN is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-569.86%
EPS Next 2Y-0.48%
EPS Next 3Y6.43%
ALGONQUIN POWER & UTILITIES / AQN.CA FAQ
What is the ChartMill fundamental rating of ALGONQUIN POWER & UTILITIES (AQN.CA) stock?
ChartMill assigns a fundamental rating of 3 / 10 to AQN.CA.
What is the valuation status for AQN stock?
ChartMill assigns a valuation rating of 1 / 10 to ALGONQUIN POWER & UTILITIES (AQN.CA). This can be considered as Overvalued.
How profitable is ALGONQUIN POWER & UTILITIES (AQN.CA) stock?
ALGONQUIN POWER & UTILITIES (AQN.CA) has a profitability rating of 3 / 10.
What is the financial health of ALGONQUIN POWER & UTILITIES (AQN.CA) stock?
The financial health rating of ALGONQUIN POWER & UTILITIES (AQN.CA) is 3 / 10.
Is the dividend of ALGONQUIN POWER & UTILITIES sustainable?
The dividend rating of ALGONQUIN POWER & UTILITIES (AQN.CA) is 6 / 10 and the dividend payout ratio is -569.86%.