CANADIAN UTILITIES LTD-A (CU.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:CU - CA1367178326 - Common Stock
43.81 CAD
+0.17 (+0.39%)
Overall CU gets a fundamental rating of 3 out of 10. We evaluated CU against 19 industry peers in the Multi-Utilities industry. While CU is still in line with the averages on profitability rating, there are concerns on its financial health. CU is valued expensive and it does not seem to be growing. CU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- In the past year CU was profitable.
- In the past year CU had a positive cash flow from operations.
- CU had positive earnings in each of the past 5 years.
- Each year in the past 5 years CU had a positive operating cash flow.
1.2 Ratios
- CU has a Return On Assets (2.16%) which is comparable to the rest of the industry.
- CU has a Return On Equity (7.68%) which is in line with its industry peers.
- Looking at the Return On Invested Capital, with a value of 3.86%, CU is doing worse than 68.42% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for CU is in line with the industry average of 3.73%.
- The 3 year average ROIC (3.80%) for CU is below the current ROIC(3.86%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.16% | ||
| ROE | 7.68% | ||
| ROIC | 3.86% |
ROA(3y)2.32%
ROA(5y)2.06%
ROE(3y)7.67%
ROE(5y)6.68%
ROIC(3y)3.8%
ROIC(5y)3.75%
1.3 Margins
- CU has a Profit Margin (14.43%) which is comparable to the rest of the industry.
- CU's Profit Margin has declined in the last couple of years.
- CU has a Operating Margin (31.51%) which is comparable to the rest of the industry.
- CU's Operating Margin has declined in the last couple of years.
- The Gross Margin of CU (88.73%) is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of CU has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.51% | ||
| PM (TTM) | 14.43% | ||
| GM | 88.73% |
OM growth 3Y1.06%
OM growth 5Y-4.58%
PM growth 3Y4.89%
PM growth 5Y-13.81%
GM growth 3Y1.25%
GM growth 5Y0.22%
2. Health
2.1 Basic Checks
- CU 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 CU has been increased compared to 1 year ago.
- Compared to 5 years ago, CU has less shares outstanding
- Compared to 1 year ago, CU has a worse debt to assets ratio.
2.2 Solvency
- CU has an Altman-Z score of 0.87. This is a bad value and indicates that CU is not financially healthy and even has some risk of bankruptcy.
- CU has a Altman-Z score of 0.87. This is amongst the best in the industry. CU outperforms 89.47% of its industry peers.
- The Debt to FCF ratio of CU is 34.08, which is on the high side as it means it would take CU, 34.08 years of fcf income to pay off all of its debts.
- CU's Debt to FCF ratio of 34.08 is in line compared to the rest of the industry. CU outperforms 52.63% of its industry peers.
- CU has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 1.68, CU is in line with its industry, outperforming 42.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 34.08 | ||
| Altman-Z | 0.87 |
ROIC/WACC0.69
WACC5.61%
2.3 Liquidity
- CU has a Current Ratio of 1.56. This is a normal value and indicates that CU is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.56, CU is in line with its industry, outperforming 52.63% of the companies in the same industry.
- CU has a Quick Ratio of 1.48. This is a normal value and indicates that CU is financially healthy and should not expect problems in meeting its short term obligations.
- CU has a Quick ratio of 1.48. This is comparable to the rest of the industry: CU outperforms 52.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.48 |
3. Growth
3.1 Past
- CU shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.13%.
- The Earnings Per Share has been growing slightly by 0.09% on average over the past years.
- Looking at the last year, CU shows a decrease in Revenue. The Revenue has decreased by -0.94% in the last year.
- The Revenue has been decreasing by -0.85% on average over the past years.
EPS 1Y (TTM)-2.13%
EPS 3Y1.06%
EPS 5Y0.09%
EPS Q2Q%5.26%
Revenue 1Y (TTM)-0.94%
Revenue growth 3Y2.11%
Revenue growth 5Y-0.85%
Sales Q2Q%-2.22%
3.2 Future
- CU is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.88% yearly.
- The Revenue is expected to grow by 1.45% on average over the next years.
EPS Next Y11.35%
EPS Next 2Y7.18%
EPS Next 3Y6.77%
EPS Next 5Y5.88%
Revenue Next Year-4.75%
Revenue Next 2Y-0.31%
Revenue Next 3Y1.45%
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 19.05, CU is valued on the expensive side.
- The rest of the industry has a similar Price/Earnings ratio as CU.
- CU is valuated rather cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 17.02 indicates a rather expensive valuation of CU.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of CU is on the same level as its industry peers.
- When comparing the Price/Forward Earnings ratio of CU to the average of the S&P500 Index (25.98), we can say CU is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.05 | ||
| Fwd PE | 17.02 |
4.2 Price Multiples
- CU's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. CU is more expensive than 73.68% of the companies in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as CU.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.41 | ||
| EV/EBITDA | 10.87 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.68
PEG (5Y)212.76
EPS Next 2Y7.18%
EPS Next 3Y6.77%
5. Dividend
5.1 Amount
- CU has a Yearly Dividend Yield of 4.20%, which is a nice return.
- Compared to an average industry Dividend Yield of 5.19, CU has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.81, CU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.2% |
5.2 History
- The dividend of CU has a limited annual growth rate of 0.91%.
- CU has paid a dividend for at least 10 years, which is a reliable track record.
- CU has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.91%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- 107.49% of the earnings are spent on dividend by CU. This is not a sustainable payout ratio.
- The dividend of CU is growing, but earnings are growing more, so the dividend growth is sustainable.
DP107.49%
EPS Next 2Y7.18%
EPS Next 3Y6.77%
CANADIAN UTILITIES LTD-A / CU.CA FAQ
Can you provide the ChartMill fundamental rating for CANADIAN UTILITIES LTD-A?
ChartMill assigns a fundamental rating of 3 / 10 to CU.CA.
What is the valuation status for CU stock?
ChartMill assigns a valuation rating of 2 / 10 to CANADIAN UTILITIES LTD-A (CU.CA). This can be considered as Overvalued.
What is the profitability of CU stock?
CANADIAN UTILITIES LTD-A (CU.CA) has a profitability rating of 4 / 10.
What is the valuation of CANADIAN UTILITIES LTD-A based on its PE and PB ratios?
The Price/Earnings (PE) ratio for CANADIAN UTILITIES LTD-A (CU.CA) is 19.05 and the Price/Book (PB) ratio is 1.29.
Is the dividend of CANADIAN UTILITIES LTD-A sustainable?
The dividend rating of CANADIAN UTILITIES LTD-A (CU.CA) is 7 / 10 and the dividend payout ratio is 107.49%.