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FORTIS INC (FTS.CA) Stock Fundamental Analysis

TSX:FTS - Toronto Stock Exchange - CA3495531079 - Common Stock - Currency: CAD

62.16  -0.17 (-0.27%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to FTS. FTS was compared to 19 industry peers in the Electric Utilities industry. There are concerns on the financial health of FTS while its profitability can be described as average. FTS has a expensive valuation and it also scores bad on growth.


Dividend Valuation Growth Profitability Health

6

1. Profitability

1.1 Basic Checks

In the past year FTS was profitable.
In the past year FTS had a positive cash flow from operations.
FTS had positive earnings in each of the past 5 years.
In the past 5 years FTS always reported a positive cash flow from operatings.
FTS.CA Yearly Net Income VS EBIT VS OCF VS FCFFTS.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 1B -1B 2B 3B

1.2 Ratios

FTS's Return On Assets of 2.28% is in line compared to the rest of the industry. FTS outperforms 52.63% of its industry peers.
The Return On Equity of FTS (7.07%) is comparable to the rest of the industry.
FTS's Return On Invested Capital of 4.17% is in line compared to the rest of the industry. FTS outperforms 57.89% of its industry peers.
FTS had an Average Return On Invested Capital over the past 3 years of 4.03%. This is in line with the industry average of 3.96%.
The 3 year average ROIC (4.03%) for FTS is below the current ROIC(4.17%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 2.28%
ROE 7.07%
ROIC 4.17%
ROA(3y)2.16%
ROA(5y)2.35%
ROE(3y)6.57%
ROE(5y)7.02%
ROIC(3y)4.03%
ROIC(5y)4.05%
FTS.CA Yearly ROA, ROE, ROICFTS.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2 4 6 8

1.3 Margins

FTS's Profit Margin of 13.90% is fine compared to the rest of the industry. FTS outperforms 63.16% of its industry peers.
FTS's Profit Margin has been stable in the last couple of years.
The Operating Margin of FTS (28.02%) is better than 63.16% of its industry peers.
FTS's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 70.66%, FTS is in the better half of the industry, outperforming 63.16% of the companies in the same industry.
In the last couple of years the Gross Margin of FTS has remained more or less at the same level.
Industry RankSector Rank
OM 28.02%
PM (TTM) 13.9%
GM 70.66%
OM growth 3Y-1.56%
OM growth 5Y-1.02%
PM growth 3Y-1.13%
PM growth 5Y-0.05%
GM growth 3Y-1.94%
GM growth 5Y-0.87%
FTS.CA Yearly Profit, Operating, Gross MarginsFTS.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60

1

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), FTS is destroying value.
The number of shares outstanding for FTS has been increased compared to 1 year ago.
Compared to 5 years ago, FTS has more shares outstanding
The debt/assets ratio for FTS is higher compared to a year ago.
FTS.CA Yearly Shares OutstandingFTS.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 100M 200M 300M 400M
FTS.CA Yearly Total Debt VS Total AssetsFTS.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 20B 40B 60B

2.2 Solvency

Based on the Altman-Z score of 0.77, we must say that FTS is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.77, FTS belongs to the top of the industry, outperforming 89.47% of the companies in the same industry.
FTS has a Debt/Equity ratio of 1.34. This is a high value indicating a heavy dependency on external financing.
FTS has a Debt to Equity ratio (1.34) which is in line with its industry peers.
Industry RankSector Rank
Debt/Equity 1.34
Debt/FCF N/A
Altman-Z 0.77
ROIC/WACC0.73
WACC5.72%
FTS.CA Yearly LT Debt VS Equity VS FCFFTS.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5B 10B 15B 20B 25B

2.3 Liquidity

FTS has a Current Ratio of 0.74. This is a bad value and indicates that FTS is not financially healthy enough and could expect problems in meeting its short term obligations.
FTS's Current ratio of 0.74 is in line compared to the rest of the industry. FTS outperforms 57.89% of its industry peers.
FTS has a Quick Ratio of 0.74. This is a bad value and indicates that FTS is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.63, FTS is in line with its industry, outperforming 57.89% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 0.74
Quick Ratio 0.63
FTS.CA Yearly Current Assets VS Current LiabilitesFTS.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

3

3. Growth

3.1 Past

FTS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.59%.
Measured over the past 5 years, FTS shows a small growth in Earnings Per Share. The EPS has been growing by 4.58% on average per year.
The Revenue has decreased by -3.02% in the past year.
Measured over the past years, FTS shows a small growth in Revenue. The Revenue has been growing by 6.54% on average per year.
EPS 1Y (TTM)2.59%
EPS 3Y6.2%
EPS 5Y4.58%
EPS Q2Q%1.19%
Revenue 1Y (TTM)-3.02%
Revenue growth 3Y8.83%
Revenue growth 5Y6.54%
Sales Q2Q%1.91%

3.2 Future

Based on estimates for the next years, FTS will show a small growth in Earnings Per Share. The EPS will grow by 5.74% on average per year.
The Revenue is expected to grow by 3.60% on average over the next years.
EPS Next Y6.44%
EPS Next 2Y5.15%
EPS Next 3Y5.02%
EPS Next 5Y5.74%
Revenue Next Year2.54%
Revenue Next 2Y3.81%
Revenue Next 3Y3.7%
Revenue Next 5Y3.6%

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 decreasing: in the next years the growth will be less than in the last years.
FTS.CA Yearly Revenue VS EstimatesFTS.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 2B 4B 6B 8B 10B
FTS.CA Yearly EPS VS EstimatesFTS.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 1 2 3 4

2

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 19.61, the valuation of FTS can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of FTS indicates a rather expensive valuation: FTS more expensive than 84.21% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.12. FTS is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 18.19 indicates a rather expensive valuation of FTS.
89.47% of the companies in the same industry are cheaper than FTS, based on the Price/Forward Earnings ratio.
FTS's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 94.77.
Industry RankSector Rank
PE 19.61
Fwd PE 18.19
FTS.CA Price Earnings VS Forward Price EarningsFTS.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, FTS is valued more expensive than 84.21% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 12.19
FTS.CA Per share dataFTS.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20 30 40

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates FTS does not grow enough to justify the current Price/Earnings ratio.
FTS has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)3.05
PEG (5Y)4.28
EPS Next 2Y5.15%
EPS Next 3Y5.02%

6

5. Dividend

5.1 Amount

FTS has a Yearly Dividend Yield of 3.97%.
FTS's Dividend Yield is comparable with the industry average which is at 4.59.
FTS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.29.
Industry RankSector Rank
Dividend Yield 3.97%

5.2 History

The dividend of FTS has a limited annual growth rate of 5.03%.
FTS has paid a dividend for at least 10 years, which is a reliable track record.
FTS has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.03%
Div Incr Years25
Div Non Decr Years33
FTS.CA Yearly Dividends per shareFTS.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

FTS pays out 50.60% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of FTS is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP50.6%
EPS Next 2Y5.15%
EPS Next 3Y5.02%
FTS.CA Yearly Income VS Free CF VS DividendFTS.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 -1B 1.5B
FTS.CA Dividend Payout.FTS.CA Dividend Payout, showing the Payout Ratio.FTS.CA Dividend Payout.PayoutRetained Earnings

FORTIS INC

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

62.16

-0.17 (-0.27%)

Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryElectric Utilities
Earnings (Last)11-05 2024-11-05/bmo
Earnings (Next)02-14 2025-02-14/amc
Inst Owners57.94%
Inst Owner ChangeN/A
Ins Owners0.05%
Ins Owner ChangeN/A
Market Cap30.92B
Analysts51.43
Price Target62.83 (1.08%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 3.97%
Yearly Dividend1.58
Dividend Growth(5Y)5.03%
DP50.6%
Div Incr Years25
Div Non Decr Years33
Ex-Date02-18 2025-02-18 (0.615)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.11%
Min EPS beat(2)1.71%
Max EPS beat(2)2.52%
EPS beat(4)4
Avg EPS beat(4)2.14%
Min EPS beat(4)1.24%
Max EPS beat(4)3.11%
EPS beat(8)7
Avg EPS beat(8)2.75%
EPS beat(12)8
Avg EPS beat(12)0.63%
EPS beat(16)10
Avg EPS beat(16)0.1%
Revenue beat(2)0
Avg Revenue beat(2)-4.13%
Min Revenue beat(2)-5.78%
Max Revenue beat(2)-2.48%
Revenue beat(4)0
Avg Revenue beat(4)-4.9%
Min Revenue beat(4)-7.48%
Max Revenue beat(4)-2.48%
Revenue beat(8)2
Avg Revenue beat(8)0.08%
Revenue beat(12)6
Avg Revenue beat(12)2.57%
Revenue beat(16)9
Avg Revenue beat(16)2.13%
PT rev (1m)-0.25%
PT rev (3m)1.92%
EPS NQ rev (1m)-0.81%
EPS NQ rev (3m)-0.64%
EPS NY rev (1m)0.41%
EPS NY rev (3m)0.5%
Revenue NQ rev (1m)4.49%
Revenue NQ rev (3m)6.21%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)-0.85%
Valuation
Industry RankSector Rank
PE 19.61
Fwd PE 18.19
P/S 2.7
P/FCF N/A
P/OCF 8.43
P/B 1.37
P/tB 3.63
EV/EBITDA 12.19
EPS(TTM)3.17
EY5.1%
EPS(NY)3.42
Fwd EY5.5%
FCF(TTM)-2.23
FCFYN/A
OCF(TTM)7.37
OCFY11.86%
SpS23.01
BVpS45.23
TBVpS17.14
PEG (NY)3.05
PEG (5Y)4.28
Profitability
Industry RankSector Rank
ROA 2.28%
ROE 7.07%
ROCE 5.02%
ROIC 4.17%
ROICexc 4.23%
ROICexgc 5.44%
OM 28.02%
PM (TTM) 13.9%
GM 70.66%
FCFM N/A
ROA(3y)2.16%
ROA(5y)2.35%
ROE(3y)6.57%
ROE(5y)7.02%
ROIC(3y)4.03%
ROIC(5y)4.05%
ROICexc(3y)4.05%
ROICexc(5y)4.08%
ROICexgc(3y)5.33%
ROICexgc(5y)5.43%
ROCE(3y)4.86%
ROCE(5y)4.89%
ROICexcg growth 3Y0.82%
ROICexcg growth 5Y-0.17%
ROICexc growth 3Y1.94%
ROICexc growth 5Y1.26%
OM growth 3Y-1.56%
OM growth 5Y-1.02%
PM growth 3Y-1.13%
PM growth 5Y-0.05%
GM growth 3Y-1.94%
GM growth 5Y-0.87%
F-Score6
Asset Turnover0.16
Health
Industry RankSector Rank
Debt/Equity 1.34
Debt/FCF N/A
Debt/EBITDA 5.93
Cap/Depr 253.85%
Cap/Sales 41.72%
Interest Coverage 250
Cash Conversion 72.05%
Profit Quality N/A
Current Ratio 0.74
Quick Ratio 0.63
Altman-Z 0.77
F-Score6
WACC5.72%
ROIC/WACC0.73
Cap/Depr(3y)230.61%
Cap/Depr(5y)250.05%
Cap/Sales(3y)35.68%
Cap/Sales(5y)38.92%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)2.59%
EPS 3Y6.2%
EPS 5Y4.58%
EPS Q2Q%1.19%
EPS Next Y6.44%
EPS Next 2Y5.15%
EPS Next 3Y5.02%
EPS Next 5Y5.74%
Revenue 1Y (TTM)-3.02%
Revenue growth 3Y8.83%
Revenue growth 5Y6.54%
Sales Q2Q%1.91%
Revenue Next Year2.54%
Revenue Next 2Y3.81%
Revenue Next 3Y3.7%
Revenue Next 5Y3.6%
EBIT growth 1Y4.87%
EBIT growth 3Y7.13%
EBIT growth 5Y5.45%
EBIT Next Year74.2%
EBIT Next 3Y25.2%
EBIT Next 5Y17.1%
FCF growth 1Y-38.11%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y25.46%
OCF growth 3Y9.49%
OCF growth 5Y6.49%