TRANSALTA CORP (TA.CA) Stock Fundamental Analysis
TSX:TA - CA89346D1078 - Common Stock
16.87 CAD
-0.47 (-2.71%)
Taking everything into account, TA scores 4 out of 10 in our fundamental rating. TA was compared to 32 industry peers in the Independent Power and Renewable Electricity Producers industry. There are concerns on the financial health of TA while its profitability can be described as average. TA has a expensive valuation and it also scores bad on growth. Finally TA also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
TA had negative earnings in the past year.
TA had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: TA reported negative net income in multiple years.
Each year in the past 5 years TA had a positive operating cash flow.
1.2 Ratios
TA has a Return On Assets (-1.87%) which is comparable to the rest of the industry.
TA has a Return On Equity (-10.58%) which is comparable to the rest of the industry.
TA has a Return On Invested Capital of 3.34%. This is in the better half of the industry: TA outperforms 78.13% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TA is above the industry average of 4.61%.
The last Return On Invested Capital (3.34%) for TA is well below the 3 year average (8.64%), which needs to be investigated, but indicates that TA had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.87% | ||
| ROE | -10.58% | ||
| ROIC | 3.34% |
ROA(3y)3.11%
ROA(5y)-0.07%
ROE(3y)17.47%
ROE(5y)0.34%
ROIC(3y)8.64%
ROIC(5y)N/A
1.3 Margins
TA's Profit Margin has improved in the last couple of years.
TA has a Operating Margin (11.45%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of TA has grown nicely.
With an excellent Gross Margin value of 83.61%, TA belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
In the last couple of years the Gross Margin of TA has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.45% | ||
| PM (TTM) | N/A | ||
| GM | 83.61% |
OM growth 3Y15.27%
OM growth 5Y8.46%
PM growth 3YN/A
PM growth 5Y22.94%
GM growth 3Y3.39%
GM growth 5Y-0.46%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TA is still creating some value.
TA has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, TA has more shares outstanding
The debt/assets ratio for TA has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.35, we must say that TA is in the distress zone and has some risk of bankruptcy.
TA has a Altman-Z score (0.35) which is in line with its industry peers.
The Debt to FCF ratio of TA is 14.89, which is on the high side as it means it would take TA, 14.89 years of fcf income to pay off all of its debts.
TA has a Debt to FCF ratio of 14.89. This is in the better half of the industry: TA outperforms 78.13% of its industry peers.
TA has a Debt/Equity ratio of 2.28. This is a high value indicating a heavy dependency on external financing.
TA has a Debt to Equity ratio of 2.28. This is in the better half of the industry: TA outperforms 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.28 | ||
| Debt/FCF | 14.89 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.5
WACC6.69%
2.3 Liquidity
TA has a Current Ratio of 0.79. This is a bad value and indicates that TA is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.79, TA perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
TA has a Quick Ratio of 0.79. This is a bad value and indicates that TA is not financially healthy enough and could expect problems in meeting its short term obligations.
TA's Quick ratio of 0.72 is in line compared to the rest of the industry. TA outperforms 53.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.72 |
3. Growth
3.1 Past
TA shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -102.94%.
TA shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.80% yearly.
Looking at the last year, TA shows a very negative growth in Revenue. The Revenue has decreased by -20.91% in the last year.
TA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.92% yearly.
EPS 1Y (TTM)-102.94%
EPS 3YN/A
EPS 5Y26.8%
EPS Q2Q%0%
Revenue 1Y (TTM)-20.91%
Revenue growth 3Y1.5%
Revenue growth 5Y3.92%
Sales Q2Q%-26.19%
3.2 Future
The Earnings Per Share is expected to grow by 22.27% on average over the next years. This is a very strong growth
TA is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -2.75% yearly.
EPS Next Y-56.89%
EPS Next 2Y-25.82%
EPS Next 3Y-13.75%
EPS Next 5Y22.27%
Revenue Next Year-7.1%
Revenue Next 2Y-12.9%
Revenue Next 3Y-6.51%
Revenue Next 5Y-2.75%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
The Price/Earnings Ratio is negative for TA. In the last year negative earnings were reported.
A Price/Forward Earnings ratio of 54.74 indicates a quite expensive valuation of TA.
68.75% of the companies in the same industry are more expensive than TA, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.72, TA is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 54.74 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TA is on the same level as its industry peers.
TA's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TA is cheaper than 81.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.51 | ||
| EV/EBITDA | 10.73 |
4.3 Compensation for Growth
The decent profitability rating of TA may justify a higher PE ratio.
TA's earnings are expected to decrease with -13.75% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-25.82%
EPS Next 3Y-13.75%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.70%, TA is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.84, TA pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.34, TA pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.7% |
5.2 History
On average, the dividend of TA grows each year by 6.10%, which is quite nice.
TA has been paying a dividend for at least 10 years, so it has a reliable track record.
TA has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)6.1%
Div Incr Years5
Div Non Decr Years8
5.3 Sustainability
The earnings of TA are negative and hence is the payout ratio. TA will probably not be able to sustain this dividend level.
TA's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-74.25%
EPS Next 2Y-25.82%
EPS Next 3Y-13.75%
TSX:TA (8/29/2025, 7:00:00 PM)
16.87
-0.47 (-2.71%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)
Earnings (Next)
Inst Owners72.07%
Inst Owner ChangeN/A
Ins Owners0.44%
Ins Owner ChangeN/A
Market Cap5.00B
Analysts78.95
Price Target18.87 (11.86%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.7% |
Yearly Dividend0.41
Dividend Growth(5Y)6.1%
DP-74.25%
Div Incr Years5
Div Non Decr Years8
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)17.25%
Min EPS beat(2)-21.18%
Max EPS beat(2)55.69%
EPS beat(4)1
Avg EPS beat(4)-176.87%
Min EPS beat(4)-564.33%
Max EPS beat(4)55.69%
EPS beat(8)4
Avg EPS beat(8)-7.79%
EPS beat(12)6
Avg EPS beat(12)9.91%
EPS beat(16)7
Avg EPS beat(16)-93.68%
Revenue beat(2)1
Avg Revenue beat(2)3.34%
Min Revenue beat(2)-14.2%
Max Revenue beat(2)20.88%
Revenue beat(4)3
Avg Revenue beat(4)12.25%
Min Revenue beat(4)-14.2%
Max Revenue beat(4)24.1%
Revenue beat(8)6
Avg Revenue beat(8)27.41%
Revenue beat(12)10
Avg Revenue beat(12)34.69%
Revenue beat(16)14
Avg Revenue beat(16)33.54%
PT rev (1m)6.82%
PT rev (3m)3.83%
EPS NQ rev (1m)-12.88%
EPS NQ rev (3m)-38.26%
EPS NY rev (1m)-44.6%
EPS NY rev (3m)-44.6%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-2.5%
Revenue NY rev (3m)-2.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 54.74 | ||
| P/S | 1.99 | ||
| P/FCF | 16.51 | ||
| P/OCF | 8.23 | ||
| P/B | 3.17 | ||
| P/tB | 6.27 | ||
| EV/EBITDA | 10.73 |
EPS(TTM)-0.06
EYN/A
EPS(NY)0.31
Fwd EY1.83%
FCF(TTM)1.02
FCFY6.06%
OCF(TTM)2.05
OCFY12.16%
SpS8.46
BVpS5.33
TBVpS2.69
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.87% | ||
| ROE | -10.58% | ||
| ROCE | 4.04% | ||
| ROIC | 3.34% | ||
| ROICexc | 3.5% | ||
| ROICexgc | 3.96% | ||
| OM | 11.45% | ||
| PM (TTM) | N/A | ||
| GM | 83.61% | ||
| FCFM | 12.09% |
ROA(3y)3.11%
ROA(5y)-0.07%
ROE(3y)17.47%
ROE(5y)0.34%
ROIC(3y)8.64%
ROIC(5y)N/A
ROICexc(3y)9.79%
ROICexc(5y)N/A
ROICexgc(3y)11.08%
ROICexgc(5y)N/A
ROCE(3y)10.46%
ROCE(5y)N/A
ROICexcg growth 3Y15.81%
ROICexcg growth 5Y18.53%
ROICexc growth 3Y15.46%
ROICexc growth 5Y17.81%
OM growth 3Y15.27%
OM growth 5Y8.46%
PM growth 3YN/A
PM growth 5Y22.94%
GM growth 3Y3.39%
GM growth 5Y-0.46%
F-Score4
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.28 | ||
| Debt/FCF | 14.89 | ||
| Debt/EBITDA | 4.18 | ||
| Cap/Depr | 53.32% | ||
| Cap/Sales | 12.17% | ||
| Interest Coverage | 1.05 | ||
| Cash Conversion | 70.78% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.72 | ||
| Altman-Z | 0.35 |
F-Score4
WACC6.69%
ROIC/WACC0.5
Cap/Depr(3y)120.63%
Cap/Depr(5y)98.51%
Cap/Sales(3y)23.21%
Cap/Sales(5y)22.28%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-102.94%
EPS 3YN/A
EPS 5Y26.8%
EPS Q2Q%0%
EPS Next Y-56.89%
EPS Next 2Y-25.82%
EPS Next 3Y-13.75%
EPS Next 5Y22.27%
Revenue 1Y (TTM)-20.91%
Revenue growth 3Y1.5%
Revenue growth 5Y3.92%
Sales Q2Q%-26.19%
Revenue Next Year-7.1%
Revenue Next 2Y-12.9%
Revenue Next 3Y-6.51%
Revenue Next 5Y-2.75%
EBIT growth 1Y-71.1%
EBIT growth 3Y17%
EBIT growth 5Y12.72%
EBIT Next Year56.24%
EBIT Next 3Y14.64%
EBIT Next 5Y19.07%
FCF growth 1Y269.27%
FCF growth 3Y-2.47%
FCF growth 5Y2.59%
OCF growth 1Y-40.86%
OCF growth 3Y-7.35%
OCF growth 5Y-1.28%