TransAlta Renewables Inc (RNW.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:RNW - CA8934631091 - Common Stock
12.48 CAD
+0.14 (+1.13%)
RNW gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 32 industry peers in the Independent Power and Renewable Electricity Producers industry. The financial health of RNW is average, but there are quite some concerns on its 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.
- RNW had a positive operating cash flow in the past year.
1.2 Ratios
- Looking at the Return On Assets, with a value of 2.49%, RNW is in line with its industry, outperforming 56.41% of the companies in the same industry.
- RNW has a Return On Equity (4.72%) which is comparable to the rest of the industry.
- RNW's Return On Invested Capital of 2.68% is in line compared to the rest of the industry. RNW outperforms 53.85% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for RNW is in line with the industry average of 3.83%.
| 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
- With an excellent Profit Margin value of 15.73%, RNW belongs to the best of the industry, outperforming 87.18% of the companies in the same industry.
- In the last couple of years the Profit Margin of RNW has grown nicely.
- Looking at the Operating Margin, with a value of 17.94%, RNW is doing worse than 64.10% of the companies in the same industry.
- 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so RNW is destroying value.
- The number of shares outstanding for RNW remains at a similar level compared to 1 year ago.
- RNW has a better debt/assets ratio than last year.
2.2 Solvency
- RNW has an Altman-Z score of 1.07. This is a bad value and indicates that RNW is not financially healthy and even 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.
- RNW has a debt to FCF ratio of 9.86. This is a negative value and a sign of low solvency as RNW would need 9.86 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 9.86, RNW belongs to the top of the industry, outperforming 84.62% of the companies in the same industry.
- A Debt/Equity ratio of 0.45 indicates that RNW is not too dependend on debt financing.
- RNW has a better Debt to Equity ratio (0.45) than 94.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 9.86 | ||
| Altman-Z | 1.07 |
ROIC/WACC0.36
WACC7.52%
2.3 Liquidity
- A Current Ratio of 0.87 indicates that RNW may have some problems paying its short term obligations.
- RNW's Current ratio of 0.87 is on the low side compared to the rest of the industry. RNW is outperformed by 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.
- Measured over the past years, RNW shows a small growth in Revenue. The Revenue has been growing by 4.06% on average per year.
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
- RNW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.90% yearly.
- The Revenue is expected to decrease by -1.49% on average over the next years.
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.
- 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
- The Price/Earnings ratio is 41.60, which means the current valuation is very expensive for RNW.
- Compared to the rest of the industry, the Price/Earnings ratio of RNW is on the same level as its industry peers.
- Compared to an average S&P500 Price/Earnings ratio of 27.38, RNW is valued quite expensively.
- Based on the Price/Forward Earnings ratio of 17.37, the valuation of RNW can be described as rather expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of RNW indicates a somewhat cheap valuation: RNW is cheaper than 74.36% of the companies listed in the same industry.
- RNW's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.6 | ||
| Fwd PE | 17.37 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RNW indicates a slightly more expensive valuation: RNW is more expensive than 74.36% of the companies listed in the same industry.
- RNW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.13 | ||
| EV/EBITDA | 18.28 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- RNW's earnings are expected to grow with 46.44% in the coming years. This may justify a more expensive valuation.
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.
- Compared to an average industry Dividend Yield of 4.91, RNW pays a better dividend. On top of this RNW pays more dividend than 87.18% of the companies listed in the same industry.
- RNW's Dividend Yield is rather good when compared to the S&P500 average which is at 1.85.
| 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
- RNW pays out 321.79% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of RNW is growing, but earnings are growing more, so the dividend growth is 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)N/A N/A
Earnings (Next)N/A N/A
Inst Owners12.12%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap3.33B
Revenue(TTM)496.00M
Net Income(TTM)78.00M
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
Graham NumberN/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%
ROICexgc growth 3Y3.02%
ROICexgc 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%
TransAlta Renewables Inc / RNW.CA FAQ
What is the ChartMill fundamental rating of TransAlta Renewables Inc (RNW.CA) stock?
ChartMill assigns a fundamental rating of 4 / 10 to RNW.CA.
Can you provide the valuation status for TransAlta Renewables Inc?
ChartMill assigns a valuation rating of 4 / 10 to TransAlta Renewables Inc (RNW.CA). This can be considered as Fairly Valued.
What is the profitability of RNW stock?
TransAlta Renewables Inc (RNW.CA) has a profitability rating of 5 / 10.
What is the valuation of TransAlta Renewables Inc based on its PE and PB ratios?
The Price/Earnings (PE) ratio for TransAlta Renewables Inc (RNW.CA) is 41.6 and the Price/Book (PB) ratio is 2.02.
Can you provide the expected EPS growth for RNW stock?
The Earnings per Share (EPS) of TransAlta Renewables Inc (RNW.CA) is expected to grow by 123% in the next year.