TransAlta Renewables Inc (RNW.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:RNW - CA8934631091 - Common Stock
12.48 CAD
+0.14 (+1.13%)
Taking everything into account, RNW scores 4 out of 10 in our fundamental rating. RNW was compared to 34 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 on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year RNW was profitable.
RNW had a positive operating cash flow in the past year.
RNW had positive earnings in each of the past 5 years.
Each year in the past 5 years RNW had a positive operating cash flow.
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 of 4.72%. This is comparable to the rest of the industry: RNW outperforms 53.85% of its industry peers.
The Return On Invested Capital of RNW (2.68%) 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 3.78%.
| 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.
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's Gross Margin of 68.95% is in line compared to the rest of the industry. RNW outperforms 56.41% of its industry peers.
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.
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.
RNW has a better Altman-Z score (1.07) than 84.62% of its industry peers.
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.
RNW has a Debt to FCF ratio of 9.86. This is amongst the best in the industry. RNW outperforms 84.62% of its industry peers.
A Debt/Equity ratio of 0.45 indicates that RNW is not too dependend on debt financing.
RNW's Debt to Equity ratio of 0.45 is amongst the best of the industry. RNW outperforms 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.
Looking at the Current ratio, with a value of 0.87, RNW is doing worse than 74.36% of the companies in the same industry.
RNW has a Quick 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.
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%.
RNW shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -13.31% yearly.
Looking at the last year, RNW shows a decrease in Revenue. The Revenue has decreased by -7.12% in the last 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
The Earnings Per Share is expected to grow by 20.90% on average over the next years. This is a very strong growth
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.
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
Based on the Price/Earnings ratio of 41.60, the valuation of RNW can be described as expensive.
RNW's Price/Earnings is on the same level as the industry average.
RNW's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.39.
Based on the Price/Forward Earnings ratio of 17.37, the valuation of RNW can be described as rather expensive.
Based on the Price/Forward Earnings ratio, RNW is valued a bit cheaper than 74.36% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of RNW to the average of the S&P500 Index (23.84), we can say RNW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.6 | ||
| Fwd PE | 17.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RNW is valued a bit more expensive than the industry average as 74.36% of the companies are valued more cheaply.
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
RNW's 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.
RNW's Dividend Yield is rather good when compared to the industry average which is at 3.64. RNW pays more dividend than 87.18% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, RNW pays a better dividend.
| 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)
Earnings (Next)
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.
What is the valuation status for RNW stock?
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.
Can you provide the PE and PB ratios for RNW stock?
The Price/Earnings (PE) ratio for TransAlta Renewables Inc (RNW.CA) is 41.6 and the Price/Book (PB) ratio is 2.02.
Is the dividend of TransAlta Renewables Inc sustainable?
The dividend rating of TransAlta Renewables Inc (RNW.CA) is 7 / 10 and the dividend payout ratio is 321.79%.