TRANSALTA CORP (TAC) Stock Fundamental Analysis
USA - NYSE:TAC - CA89346D1078 - Common Stock
14.47 USD
+0.77 (+5.62%)
14.4 USD
-0.07 (-0.48%)
Taking everything into account, TAC scores 4 out of 10 in our fundamental rating. TAC was compared to 20 industry peers in the Independent Power and Renewable Electricity Producers industry. While TAC is still in line with the averages on profitability rating, there are concerns on its financial health. TAC has a expensive valuation and it also scores bad on growth. Finally TAC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year TAC has reported negative net income.
In the past year TAC had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: TAC reported negative net income in multiple 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.
With a Return On Equity value of -10.58%, TAC is not doing good in the industry: 65.00% of the companies in the same industry are doing better.
TAC has a better Return On Invested Capital (3.34%) than 70.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TAC is above the industry average of 4.08%.
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 comparable to the rest of the industry.
TAC's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 83.61%, TAC belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
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
TAC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
TAC has less shares outstanding than it did 1 year ago.
TAC has more shares outstanding than it did 5 years ago.
The debt/assets ratio for TAC has been reduced compared to a year ago.
2.2 Solvency
TAC has an Altman-Z score of 0.42. This is a bad value and indicates that TAC is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of TAC (0.42) is comparable to the rest of the industry.
The Debt to FCF ratio of TAC is 14.89, which is on the high side as it means it would take TAC, 14.89 years of fcf income to pay off all of its debts.
TAC's Debt to FCF ratio of 14.89 is amongst the best of the industry. TAC outperforms 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.
With a Debt to Equity ratio value of 2.28, TAC perfoms like the industry average, outperforming 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.28 | ||
| Debt/FCF | 14.89 | ||
| Altman-Z | 0.42 |
ROIC/WACC0.48
WACC7%
2.3 Liquidity
A Current Ratio of 0.79 indicates that TAC may have some problems paying its short term obligations.
TAC has a Current ratio (0.79) which is in line with its industry peers.
A Quick Ratio of 0.72 indicates that TAC may have some problems paying its short term obligations.
The Quick ratio of TAC (0.72) is worse than 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.72 |
3. Growth
3.1 Past
The earnings per share for TAC have decreased strongly by -102.94% in the last year.
TAC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.80% yearly.
The Revenue for TAC has decreased by -20.91% in the past year. This is quite bad
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.
The Revenue is expected to decrease by -2.75% on average over the next years.
EPS Next Y-70.48%
EPS Next 2Y-24.61%
EPS Next 3Y-13.57%
EPS Next 5Y22.27%
Revenue Next Year-6.24%
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.
TAC is valuated quite expensively with a Price/Forward Earnings ratio of 63.49.
TAC's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.32, TAC is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 63.49 |
4.2 Price Multiples
70.00% of the companies in the same industry are more expensive than TAC, based on the Enterprise Value to EBITDA ratio.
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 | 19.77 | ||
| EV/EBITDA | 11.72 |
4.3 Compensation for Growth
TAC's earnings are expected to decrease with -13.57% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-24.61%
EPS Next 3Y-13.57%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.85%, TAC is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.14, TAC pays a better dividend. On top of this TAC pays more dividend than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, TAC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.85% |
5.2 History
On average, the dividend of TAC grows each year by 6.10%, which is quite nice.
TAC has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of TAC decreased 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-24.61%
EPS Next 3Y-13.57%
14.47
+0.77 (+5.62%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)
Earnings (Next)
Inst Owners71.21%
Inst Owner Change1.53%
Ins Owners0.44%
Ins Owner ChangeN/A
Market Cap4.29B
Analysts78.95
Price Target13.54 (-6.43%)
Short Float %2.78%
Short Ratio6.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.85% |
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)-0.61%
PT rev (3m)5.92%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-24.85%
EPS NY rev (1m)-31.53%
EPS NY rev (3m)-62.07%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.93%
Revenue NY rev (3m)-1.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 63.49 | ||
| P/S | 2.39 | ||
| P/FCF | 19.77 | ||
| P/OCF | 9.85 | ||
| P/B | 3.79 | ||
| P/tB | 7.51 | ||
| EV/EBITDA | 11.72 |
EPS(TTM)-0.04
EYN/A
EPS(NY)0.23
Fwd EY1.57%
FCF(TTM)0.73
FCFY5.06%
OCF(TTM)1.47
OCFY10.15%
SpS6.06
BVpS3.81
TBVpS1.93
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 | 0.42 |
F-Score4
WACC7%
ROIC/WACC0.48
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-70.48%
EPS Next 2Y-24.61%
EPS Next 3Y-13.57%
EPS Next 5Y22.27%
Revenue 1Y (TTM)-20.91%
Revenue growth 3Y1.5%
Revenue growth 5Y3.92%
Sales Q2Q%-26.19%
Revenue Next Year-6.24%
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 Year64.35%
EBIT Next 3Y15.21%
EBIT Next 5Y19.44%
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%