TRANSALTA CORP (TAC) Stock Fundamental Analysis
NYSE:TAC - CA89346D1078 - Common Stock
12.68 USD
+0.33 (+2.67%)
12.68 USD
0 (0%)
Overall TAC gets a fundamental rating of 4 out of 10. We evaluated TAC against 20 industry peers in the Independent Power and Renewable Electricity Producers industry. TAC has a medium profitability rating, but doesn't score so well on its financial health evaluation. TAC is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year TAC has reported negative net income.
TAC had a positive operating cash flow in the past year.
In multiple years TAC reported negative net income over the last 5 years.
In the past 5 years TAC always reported a positive cash flow from operatings.
1.2 Ratios
TAC has a Return On Assets of -1.87%. This is in the lower half of the industry: TAC underperforms 65.00% of its industry peers.
TAC's Return On Equity of -10.58% is on the low side compared to the rest of the industry. TAC is outperformed by 65.00% of its industry peers.
TAC has a better Return On Invested Capital (3.34%) than 70.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TAC is above the industry average of 4.21%.
The last Return On Invested Capital (3.34%) for TAC is well below the 3 year average (8.64%), which needs to be investigated, but indicates that TAC 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
TAC's Profit Margin has improved in the last couple of years.
TAC has a Operating Margin (11.45%) which is in line with its industry peers.
In the last couple of years the Operating Margin of TAC has grown nicely.
TAC has a better Gross Margin (83.61%) than 95.00% of its industry peers.
In the last couple of years the Gross Margin of TAC 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TAC is creating some value.
TAC has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, TAC has more shares outstanding
TAC has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.35, we must say that TAC is in the distress zone and has some risk of bankruptcy.
TAC's Altman-Z score of 0.35 is in line compared to the rest of the industry. TAC outperforms 45.00% of its industry peers.
TAC has a debt to FCF ratio of 14.89. This is a negative value and a sign of low solvency as TAC would need 14.89 years to pay back of all of its debts.
The Debt to FCF ratio of TAC (14.89) is better than 85.00% of its industry peers.
A Debt/Equity ratio of 2.28 is on the high side and indicates that TAC has dependencies on debt financing.
TAC has a Debt to Equity ratio (2.28) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.28 | ||
| Debt/FCF | 14.89 | ||
| Altman-Z | 0.35 |
ROIC/WACC0.49
WACC6.78%
2.3 Liquidity
TAC has a Current Ratio of 0.79. This is a bad value and indicates that TAC is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of TAC (0.79) is comparable to the rest of the industry.
A Quick Ratio of 0.72 indicates that TAC may have some problems paying its short term obligations.
TAC has a worse Quick ratio (0.72) than 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.72 |
3. Growth
3.1 Past
TAC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -102.94%.
The Earnings Per Share has been growing by 26.80% on average over the past years. This is a very strong growth
TAC shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -20.91%.
The Revenue has been growing slightly by 3.92% on average over the past years.
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
Based on estimates for the next years, TAC will show a very strong growth in Earnings Per Share. The EPS will grow by 22.27% on average per year.
Based on estimates for the next years, TAC will show a decrease in Revenue. The Revenue will decrease by -2.75% on average per year.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
TAC reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
A Price/Forward Earnings ratio of 56.83 indicates a quite expensive valuation of TAC.
TAC's Price/Forward Earnings is on the same level as the industry average.
TAC is valuated expensively when we compare the Price/Forward Earnings ratio to 22.54, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 56.83 |
4.2 Price Multiples
TAC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TAC is cheaper than 70.00% of the companies in the same industry.
90.00% of the companies in the same industry are more expensive than TAC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.13 | ||
| EV/EBITDA | 10.63 |
4.3 Compensation for Growth
A cheap valuation may be justified as TAC's earnings are expected to decrease with -13.75% in the coming years.
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 1.55%, TAC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.75, TAC pays a bit more dividend than its industry peers.
TAC's Dividend Yield is slightly below the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
5.2 History
The dividend of TAC is nicely growing with an annual growth rate of 6.10%!
TAC has paid a dividend for at least 10 years, which is a reliable track record.
TAC has decreased its dividend in the last 3 years.
Dividend Growth(5Y)6.1%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
The earnings of TAC are negative and hence is the payout ratio. TAC will probably not be able to sustain this dividend level.
TAC'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%
12.68
+0.33 (+2.67%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)
Earnings (Next)
Inst Owners72.07%
Inst Owner Change1.53%
Ins Owners0.44%
Ins Owner ChangeN/A
Market Cap3.76B
Analysts78.95
Price Target13.62 (7.41%)
Short Float %2.67%
Short Ratio6.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
Yearly Dividend0.29
Dividend Growth(5Y)6.1%
DP-74.25%
Div Incr Years2
Div Non Decr Years2
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)-1.02%
PT rev (3m)11.53%
EPS NQ rev (1m)-24.85%
EPS NQ rev (3m)-46.74%
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)-2.74%
Revenue NY rev (3m)-2.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 56.83 | ||
| P/S | 2.07 | ||
| P/FCF | 17.13 | ||
| P/OCF | 8.54 | ||
| P/B | 3.29 | ||
| P/tB | 6.51 | ||
| EV/EBITDA | 10.63 |
EPS(TTM)-0.04
EYN/A
EPS(NY)0.22
Fwd EY1.76%
FCF(TTM)0.74
FCFY5.84%
OCF(TTM)1.48
OCFY11.71%
SpS6.12
BVpS3.86
TBVpS1.95
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
WACC6.78%
ROIC/WACC0.49
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 5Y18.95%
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%