TRANSALTA CORP (TA.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:TA - CA89346D1078 - Common Stock
20.32 CAD
+0.47 (+2.37%)
We assign a fundamental rating of 4 out of 10 to TA. TA was compared to 33 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.
1. Profitability
1.1 Basic Checks
TA had positive 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.
In the past 5 years TA always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of TA (-2.17%) is comparable to the rest of the industry.
With a Return On Equity value of -12.58%, TA perfoms like the industry average, outperforming 45.45% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 2.51%, TA is in the better half of the industry, outperforming 69.70% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TA is above the industry average of 3.81%.
The 3 year average ROIC (8.64%) for TA is well above the current ROIC(2.51%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.17% | ||
| ROE | -12.58% | ||
| ROIC | 2.51% |
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 of 8.62%. This is comparable to the rest of the industry: TA outperforms 45.45% of its industry peers.
TA's Operating Margin has improved in the last couple of years.
TA has a better Gross Margin (83.57%) than 84.85% of its industry peers.
TA's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.62% | ||
| PM (TTM) | N/A | ||
| GM | 83.57% |
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
TA has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is 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 0.38, we must say that TA is in the distress zone and has some risk of bankruptcy.
TA has a Altman-Z score (0.38) which is in line with its industry peers.
The Debt to FCF ratio of TA is 12.69, which is on the high side as it means it would take TA, 12.69 years of fcf income to pay off all of its debts.
TA has a better Debt to FCF ratio (12.69) than 75.76% of its industry peers.
A Debt/Equity ratio of 2.28 is on the high side and indicates that TA has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 2.28, TA is in line with its industry, outperforming 57.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.28 | ||
| Debt/FCF | 12.69 | ||
| Altman-Z | 0.38 |
ROIC/WACC0.37
WACC6.81%
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.
TA has a Current ratio of 0.79. This is in the better half of the industry: TA outperforms 60.61% of its industry peers.
A Quick Ratio of 0.71 indicates that TA may have some problems paying its short term obligations.
The Quick ratio of TA (0.71) is better than 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
TA shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -92.16%.
The Earnings Per Share has been growing by 26.80% on average over the past years. This is a very strong growth
The Revenue for TA has decreased by -11.00% in the past year. This is quite bad
TA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.92% yearly.
EPS 1Y (TTM)-92.16%
EPS 3YN/A
EPS 5Y26.8%
EPS Q2Q%83.33%
Revenue 1Y (TTM)-11%
Revenue growth 3Y1.5%
Revenue growth 5Y3.92%
Sales Q2Q%-3.04%
3.2 Future
Based on estimates for the next years, TA will show a very strong growth in Earnings Per Share. The EPS will grow by 22.27% on average per year.
TA is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.63% yearly.
EPS Next Y-152.42%
EPS Next 2Y-24.77%
EPS Next 3Y-3.79%
EPS Next 5Y22.27%
Revenue Next Year-8.24%
Revenue Next 2Y-11.53%
Revenue Next 3Y-6.92%
Revenue Next 5Y-1.63%
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.
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 508.00, which means the current valuation is very expensive for TA.
The rest of the industry has a similar Price/Earnings ratio as TA.
TA's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.31.
TA is valuated quite expensively with a Price/Forward Earnings ratio of 64.11.
TA's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TA is cheaper than 63.64% of the companies in the same industry.
TA is valuated expensively when we compare the Price/Forward Earnings ratio to 36.56, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 508 | ||
| Fwd PE | 64.11 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TA indicates a somewhat cheap valuation: TA is cheaper than 75.76% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.32 | ||
| EV/EBITDA | 12.58 |
4.3 Compensation for Growth
TA has a very decent profitability rating, which may justify a higher PE ratio.
TA's earnings are expected to decrease with -3.79% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)18.96
EPS Next 2Y-24.77%
EPS Next 3Y-3.79%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.31%, TA has a reasonable but not impressive dividend return.
TA's Dividend Yield is slightly below the industry average, which is at 4.77.
Compared to an average S&P500 Dividend Yield of 2.32, TA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
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.
As TA did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
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.
The dividend of TA is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-64.77%
EPS Next 2Y-24.77%
EPS Next 3Y-3.79%
TSX:TA (11/28/2025, 7:00:00 PM)
20.32
+0.47 (+2.37%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)
Earnings (Next)
Inst Owners71.21%
Inst Owner ChangeN/A
Ins Owners0.44%
Ins Owner ChangeN/A
Market Cap6.03B
Revenue(TTM)2.48B
Net Income(TTM)-193.00M
Analysts78.95
Price Target23.14 (13.88%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
Yearly Dividend0.41
Dividend Growth(5Y)6.1%
DP-64.77%
Div Incr Years5
Div Non Decr Years8
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-30.35%
Min EPS beat(2)-116.39%
Max EPS beat(2)55.69%
EPS beat(4)1
Avg EPS beat(4)-161.55%
Min EPS beat(4)-564.33%
Max EPS beat(4)55.69%
EPS beat(8)3
Avg EPS beat(8)-60.42%
EPS beat(12)6
Avg EPS beat(12)2.11%
EPS beat(16)7
Avg EPS beat(16)-18.99%
Revenue beat(2)1
Avg Revenue beat(2)-1.63%
Min Revenue beat(2)-14.2%
Max Revenue beat(2)10.93%
Revenue beat(4)3
Avg Revenue beat(4)10.43%
Min Revenue beat(4)-14.2%
Max Revenue beat(4)24.1%
Revenue beat(8)6
Avg Revenue beat(8)16.4%
Revenue beat(12)10
Avg Revenue beat(12)30.69%
Revenue beat(16)14
Avg Revenue beat(16)30.68%
PT rev (1m)22.6%
PT rev (3m)22.6%
EPS NQ rev (1m)5.29%
EPS NQ rev (3m)8.45%
EPS NY rev (1m)-288.43%
EPS NY rev (3m)-221.59%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)-2.17%
Revenue NY rev (3m)-1.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 508 | ||
| Fwd PE | 64.11 | ||
| P/S | 2.43 | ||
| P/FCF | 17.32 | ||
| P/OCF | 9.57 | ||
| P/B | 3.93 | ||
| P/tB | 7.9 | ||
| EV/EBITDA | 12.58 |
EPS(TTM)0.04
EY0.2%
EPS(NY)0.32
Fwd EY1.56%
FCF(TTM)1.17
FCFY5.77%
OCF(TTM)2.12
OCFY10.45%
SpS8.37
BVpS5.17
TBVpS2.57
PEG (NY)N/A
PEG (5Y)18.96
Graham Number2.16
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.17% | ||
| ROE | -12.58% | ||
| ROCE | 3.04% | ||
| ROIC | 2.51% | ||
| ROICexc | 2.65% | ||
| ROICexgc | 3% | ||
| OM | 8.62% | ||
| PM (TTM) | N/A | ||
| GM | 83.57% | ||
| FCFM | 14.01% |
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
ROICexgc growth 3Y15.81%
ROICexgc 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-Score5
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.28 | ||
| Debt/FCF | 12.69 | ||
| Debt/EBITDA | 4.44 | ||
| Cap/Depr | 49.13% | ||
| Cap/Sales | 11.35% | ||
| Interest Coverage | 0.75 | ||
| Cash Conversion | 79.95% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 0.38 |
F-Score5
WACC6.81%
ROIC/WACC0.37
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)-92.16%
EPS 3YN/A
EPS 5Y26.8%
EPS Q2Q%83.33%
EPS Next Y-152.42%
EPS Next 2Y-24.77%
EPS Next 3Y-3.79%
EPS Next 5Y22.27%
Revenue 1Y (TTM)-11%
Revenue growth 3Y1.5%
Revenue growth 5Y3.92%
Sales Q2Q%-3.04%
Revenue Next Year-8.24%
Revenue Next 2Y-11.53%
Revenue Next 3Y-6.92%
Revenue Next 5Y-1.63%
EBIT growth 1Y-67.18%
EBIT growth 3Y17%
EBIT growth 5Y12.72%
EBIT Next Year59.83%
EBIT Next 3Y15.48%
EBIT Next 5Y18.16%
FCF growth 1Y-15.94%
FCF growth 3Y-2.47%
FCF growth 5Y2.59%
OCF growth 1Y-58.14%
OCF growth 3Y-7.35%
OCF growth 5Y-1.28%
TRANSALTA CORP / TA.CA FAQ
Can you provide the ChartMill fundamental rating for TRANSALTA CORP?
ChartMill assigns a fundamental rating of 4 / 10 to TA.CA.
Can you provide the valuation status for TRANSALTA CORP?
ChartMill assigns a valuation rating of 3 / 10 to TRANSALTA CORP (TA.CA). This can be considered as Overvalued.
Can you provide the profitability details for TRANSALTA CORP?
TRANSALTA CORP (TA.CA) has a profitability rating of 6 / 10.
What are the PE and PB ratios of TRANSALTA CORP (TA.CA) stock?
The Price/Earnings (PE) ratio for TRANSALTA CORP (TA.CA) is 508 and the Price/Book (PB) ratio is 3.93.
Can you provide the financial health for TA stock?
The financial health rating of TRANSALTA CORP (TA.CA) is 3 / 10.