TransAlta Renewables Inc (RNW.CA) Stock Fundamental Analysis
TSX:RNW - Toronto Stock Exchange - CA8934631091 - Common Stock - Currency: CAD
Overall RNW gets a fundamental rating of 4 out of 10. We evaluated RNW against 39 industry peers in the Independent Power and Renewable Electricity Producers industry. RNW has an average financial health and profitability rating. 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.
In the past 5 years RNW has always been profitable.
In the past 5 years RNW always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 2.49%, RNW perfoms like the industry average, outperforming 56.41% of the companies in the same industry.
Looking at the Return On Equity, with a value of 4.72%, RNW is in line with its industry, outperforming 53.85% of the companies in the same industry.
RNW has a Return On Invested Capital of 2.68%. This is comparable to the rest of the industry: RNW outperforms 53.85% of its industry peers.
RNW had an Average Return On Invested Capital over the past 3 years of 3.02%. This 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
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.
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 in line with 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.
Compared to 1 year ago, RNW has about the same amount of shares outstanding.
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.
The Altman-Z score of RNW (1.07) is better than 84.62% of its industry peers.
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.
With an excellent Debt to FCF ratio value of 9.86, RNW belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
RNW has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
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.
RNW has a Current ratio of 0.87. This is in the lower half of the industry: RNW underperforms 74.36% of its industry peers.
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 worse Quick ratio (0.83) than 71.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
The earnings per share for RNW have decreased strongly by -30.07% in the last year.
Measured over the past years, RNW shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -13.31% on average per year.
Looking at the last year, RNW shows a decrease in Revenue. The Revenue has decreased by -7.12% in the last year.
The Revenue has been growing slightly by 4.06% on average over the past years.
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
Based on estimates for the next years, RNW will show a very strong growth in Earnings Per Share. The EPS will grow by 20.90% on average per year.
Based on estimates for the next years, RNW will show a decrease in Revenue. The Revenue will decrease by -1.49% on average per year.
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
With a Price/Earnings ratio of 41.60, RNW can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of RNW is on the same level as its industry peers.
RNW is valuated expensively when we compare the Price/Earnings ratio to 26.19, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 17.37, which indicates a rather expensive current 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 22.13, RNW is valued a bit 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.
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 4.48. RNW pays more dividend than 87.18% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, 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.
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%