TransAlta Renewables Inc (RNW.CA) Stock Fundamental Analysis
TSX:RNW - CA8934631091 - Common Stock
12.48 CAD
+0.14 (+1.13%)
Overall RNW gets a fundamental rating of 4 out of 10. We evaluated RNW against 33 industry peers in the Independent Power and Renewable Electricity Producers industry. RNW has only an average score on both its financial health and profitability. RNW has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
RNW had positive earnings in the past year.
In the past year RNW had a positive cash flow from operations.
In the past 5 years RNW has always been profitable.
RNW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of RNW (2.49%) is comparable to the rest of the industry.
RNW's Return On Equity of 4.72% is in line compared to the rest of the industry. RNW outperforms 53.85% of its industry peers.
RNW has a Return On Invested Capital (2.68%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for RNW is in line with the industry average of 4.55%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.49% | ||
| ROE | 4.72% | ||
| ROIC | 2.68% |
ROA(3y)2.85%
ROA(5y)3.94%
ROE(3y)5.01%
ROE(5y)6.59%
ROIC(3y)3.02%
ROIC(5y)3.19%
1.3 Margins
The Profit Margin of RNW (15.73%) is better than 87.18% of its industry peers.
In the last couple of years the Profit Margin of RNW has grown nicely.
RNW has a worse Operating Margin (17.94%) than 64.10% of its industry peers.
RNW's Operating Margin has declined in the last couple of years.
RNW has a Gross Margin (68.95%) which is comparable to the rest of the industry.
RNW's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.94% | ||
| PM (TTM) | 15.73% | ||
| GM | 68.95% |
OM growth 3Y-10.6%
OM growth 5Y-8.51%
PM growth 3Y-30.95%
PM growth 5Y46.46%
GM growth 3Y-7.48%
GM growth 5Y-3.95%
2. Health
2.1 Basic Checks
RNW 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 RNW remains at a similar level compared to 1 year ago.
Compared to 1 year ago, RNW has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.07, we must say that RNW is in the distress zone and has some risk of bankruptcy.
With an excellent Altman-Z score value of 1.07, RNW belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
The Debt to FCF ratio of RNW is 9.86, which is on the high side as it means it would take RNW, 9.86 years of fcf income to pay off all of its debts.
RNW has a better Debt to FCF ratio (9.86) than 84.62% of its industry peers.
RNW has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
With an excellent Debt to Equity ratio value of 0.45, RNW belongs to the best of the industry, outperforming 94.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 9.86 | ||
| Altman-Z | 1.07 |
ROIC/WACC0.36
WACC7.52%
2.3 Liquidity
RNW has a Current Ratio of 0.87. This is a bad value and indicates that RNW is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of RNW (0.87) is worse than 74.36% of its industry peers.
A Quick Ratio of 0.83 indicates that RNW may have some problems paying its short term obligations.
RNW has a Quick ratio of 0.83. This is in the lower half of the industry: RNW underperforms 71.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
RNW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -30.07%.
The earnings per share for RNW have been decreasing by -13.31% on average. This is quite bad
The Revenue has decreased by -7.12% in the past year.
RNW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.06% yearly.
EPS 1Y (TTM)-30.07%
EPS 3Y-26.05%
EPS 5Y-13.31%
EPS Q2Q%2.04%
Revenue 1Y (TTM)-7.12%
Revenue growth 3Y7.88%
Revenue growth 5Y4.06%
Sales Q2Q%-28.78%
3.2 Future
The Earnings Per Share is expected to grow by 20.90% on average over the next years. This is a very strong growth
RNW is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.49% yearly.
EPS Next Y123%
EPS Next 2Y60.49%
EPS Next 3Y46.44%
EPS Next 5Y20.9%
Revenue Next Year-10.98%
Revenue Next 2Y-1.59%
Revenue Next 3Y-0.38%
Revenue Next 5Y-1.49%
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
RNW is valuated quite expensively with a Price/Earnings ratio of 41.60.
RNW's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.02. RNW is valued rather expensively when compared to this.
A Price/Forward Earnings ratio of 17.37 indicates a rather expensive valuation of RNW.
Based on the Price/Forward Earnings ratio, RNW is valued a bit cheaper than the industry average as 74.36% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.66, RNW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.6 | ||
| Fwd PE | 17.37 |
4.2 Price Multiples
RNW's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. RNW is more expensive than 74.36% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RNW is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.13 | ||
| EV/EBITDA | 18.28 |
4.3 Compensation for Growth
RNW's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as RNW's earnings are expected to grow with 46.44% in the coming years.
PEG (NY)0.34
PEG (5Y)N/A
EPS Next 2Y60.49%
EPS Next 3Y46.44%
5. Dividend
5.1 Amount
RNW has a Yearly Dividend Yield of 7.53%, which is a nice return.
RNW's Dividend Yield is rather good when compared to the industry average which is at 4.78. RNW pays more dividend than 87.18% of the companies in the same industry.
RNW's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.53% |
5.2 History
The dividend of RNW has a limited annual growth rate of 1.01%.
RNW has been paying a dividend for over 5 years, so it has already some track record.
RNW has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)1.01%
Div Incr Years0
Div Non Decr Years4
5.3 Sustainability
321.79% of the earnings are spent on dividend by RNW. This is not a sustainable payout ratio.
RNW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP321.79%
EPS Next 2Y60.49%
EPS Next 3Y46.44%
TSX:RNW (10/10/2023, 7:00:00 PM)
12.48
+0.14 (+1.13%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)
Earnings (Next)
Inst Owners12.12%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap3.33B
Analysts50.77
Price Target13.25 (6.17%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.53% |
Yearly Dividend0.94
Dividend Growth(5Y)1.01%
DP321.79%
Div Incr Years0
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-40.17%
Min EPS beat(2)-67.61%
Max EPS beat(2)-12.73%
EPS beat(4)0
Avg EPS beat(4)-72.36%
Min EPS beat(4)-169.31%
Max EPS beat(4)-12.73%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-13.24%
Min Revenue beat(2)-17.17%
Max Revenue beat(2)-9.31%
Revenue beat(4)2
Avg Revenue beat(4)-0.59%
Min Revenue beat(4)-17.17%
Max Revenue beat(4)14.42%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-0.01%
PT rev (3m)-2.41%
EPS NQ rev (1m)0%
EPS NQ rev (3m)15.11%
EPS NY rev (1m)0%
EPS NY rev (3m)-13.03%
Revenue NQ rev (1m)99895.8%
Revenue NQ rev (3m)0.32%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-6.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.6 | ||
| Fwd PE | 17.37 | ||
| P/S | 6.72 | ||
| P/FCF | 40.13 | ||
| P/OCF | 14.23 | ||
| P/B | 2.02 | ||
| P/tB | 2.11 | ||
| EV/EBITDA | 18.28 |
EPS(TTM)0.3
EY2.4%
EPS(NY)0.72
Fwd EY5.76%
FCF(TTM)0.31
FCFY2.49%
OCF(TTM)0.88
OCFY7.03%
SpS1.86
BVpS6.19
TBVpS5.9
PEG (NY)0.34
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.49% | ||
| ROE | 4.72% | ||
| ROCE | 3.08% | ||
| ROIC | 2.68% | ||
| ROICexc | 2.73% | ||
| ROICexgc | 2.8% | ||
| OM | 17.94% | ||
| PM (TTM) | 15.73% | ||
| GM | 68.95% | ||
| FCFM | 16.73% |
ROA(3y)2.85%
ROA(5y)3.94%
ROE(3y)5.01%
ROE(5y)6.59%
ROIC(3y)3.02%
ROIC(5y)3.19%
ROICexc(3y)3.33%
ROICexc(5y)3.41%
ROICexgc(3y)3.43%
ROICexgc(5y)3.53%
ROCE(3y)3.59%
ROCE(5y)3.74%
ROICexcg growth 3Y3.02%
ROICexcg growth 5Y-2.2%
ROICexc growth 3Y3.17%
ROICexc growth 5Y-2.14%
OM growth 3Y-10.6%
OM growth 5Y-8.51%
PM growth 3Y-30.95%
PM growth 5Y46.46%
GM growth 3Y-7.48%
GM growth 5Y-3.95%
F-Score5
Asset Turnover0.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 9.86 | ||
| Debt/EBITDA | 3.34 | ||
| Cap/Depr | 111.85% | ||
| Cap/Sales | 30.44% | ||
| Interest Coverage | 2.41 | ||
| Cash Conversion | 104.46% | ||
| Profit Quality | 106.41% | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.83 | ||
| Altman-Z | 1.07 |
F-Score5
WACC7.52%
ROIC/WACC0.36
Cap/Depr(3y)52.56%
Cap/Depr(5y)46.42%
Cap/Sales(3y)14.83%
Cap/Sales(5y)13.02%
Profit Quality(3y)210.28%
Profit Quality(5y)186.98%
High Growth Momentum
Growth
EPS 1Y (TTM)-30.07%
EPS 3Y-26.05%
EPS 5Y-13.31%
EPS Q2Q%2.04%
EPS Next Y123%
EPS Next 2Y60.49%
EPS Next 3Y46.44%
EPS Next 5Y20.9%
Revenue 1Y (TTM)-7.12%
Revenue growth 3Y7.88%
Revenue growth 5Y4.06%
Sales Q2Q%-28.78%
Revenue Next Year-10.98%
Revenue Next 2Y-1.59%
Revenue Next 3Y-0.38%
Revenue Next 5Y-1.49%
EBIT growth 1Y-23.28%
EBIT growth 3Y-3.56%
EBIT growth 5Y-4.8%
EBIT Next Year272.09%
EBIT Next 3Y56.41%
EBIT Next 5Y37.38%
FCF growth 1Y-67.06%
FCF growth 3Y-22.62%
FCF growth 5Y-11.22%
OCF growth 1Y-20.95%
OCF growth 3Y-8.09%
OCF growth 5Y-2.39%