TRANSALTA CORP (TAC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TAC - CA89346D1078 - Common Stock
12.37 USD
+0.17 (+1.39%)
12.9575 USD
+0.59 (+4.75%)
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. While TAC is still in line with the averages on profitability rating, there are concerns on its financial health. TAC is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year TAC was profitable.
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
The Return On Assets of TAC (-2.17%) is worse than 65.00% of its industry peers.
The Return On Equity of TAC (-12.58%) is worse than 65.00% of its industry peers.
TAC has a Return On Invested Capital (2.51%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for TAC is above the industry average of 4.09%.
The 3 year average ROIC (8.64%) for TAC 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
In the last couple of years the Profit Margin of TAC has grown nicely.
TAC has a worse Operating Margin (8.62%) than 60.00% of its industry peers.
In the last couple of years the Operating Margin of TAC has grown nicely.
The Gross Margin of TAC (83.57%) is better than 100.00% 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 | 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TAC is still creating some value.
Compared to 1 year ago, TAC has less shares outstanding
Compared to 5 years ago, TAC has more shares outstanding
Compared to 1 year ago, TAC has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.30, we must say that TAC is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.30, TAC is doing worse than 60.00% of the companies in the same industry.
TAC has a debt to FCF ratio of 12.69. This is a negative value and a sign of low solvency as TAC would need 12.69 years to pay back of all of its debts.
TAC has a Debt to FCF ratio of 12.69. This is in the better half of the industry: TAC outperforms 80.00% 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 | 12.69 | ||
| Altman-Z | 0.3 |
ROIC/WACC0.36
WACC6.97%
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.
Looking at the Current ratio, with a value of 0.79, TAC is in line with its industry, outperforming 55.00% of the companies in the same industry.
A Quick Ratio of 0.71 indicates that TAC may have some problems paying its short term obligations.
TAC's Quick ratio of 0.71 is in line compared to the rest of the industry. TAC outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
TAC shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -92.16%.
Measured over the past years, TAC shows a very strong growth in Earnings Per Share. The EPS has been growing by 26.80% on average per year.
The Revenue for TAC has decreased by -11.00% in the past year. This is quite bad
TAC 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, 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 -1.63% on average over the next years.
EPS Next Y-76.78%
EPS Next 2Y-14.26%
EPS Next 3Y-9.5%
EPS Next 5Y22.27%
Revenue Next Year-7.03%
Revenue Next 2Y-11.68%
Revenue Next 3Y-7.04%
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.
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
With a Price/Earnings ratio of 412.33, TAC can be considered very expensive at the moment.
TAC's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of TAC to the average of the S&P500 Index (27.19), we can say TAC is valued expensively.
The Price/Forward Earnings ratio is 41.65, which means the current valuation is very expensive for TAC.
TAC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TAC is cheaper than 65.00% of the companies in the same industry.
TAC is valuated expensively when we compare the Price/Forward Earnings ratio to 23.88, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 412.33 | ||
| Fwd PE | 41.65 |
4.2 Price Multiples
TAC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TAC is cheaper than 75.00% of the companies in the same industry.
TAC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TAC is cheaper than 95.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.62 | ||
| EV/EBITDA | 11.3 |
4.3 Compensation for Growth
TAC's earnings are expected to decrease with -9.50% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)15.39
EPS Next 2Y-14.26%
EPS Next 3Y-9.5%
5. Dividend
5.1 Amount
TAC has a Yearly Dividend Yield of 1.54%.
In the last 3 months the price of TAC has falen by -20.65%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 1.42, TAC pays a bit more dividend than its industry peers.
TAC's Dividend Yield is slightly below the S&P500 average, which is at 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.54% |
5.2 History
On average, the dividend of TAC grows each year by 6.10%, which is quite nice.
TAC has been paying a dividend for at least 10 years, so it has 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
TAC has negative earnings and hence a negative payout ratio. The dividend may be in danger.
The dividend of TAC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-64.77%
EPS Next 2Y-14.26%
EPS Next 3Y-9.5%
12.37
+0.17 (+1.39%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)
Earnings (Next)
Inst Owners75.64%
Inst Owner Change0%
Ins Owners0.25%
Ins Owner ChangeN/A
Market Cap3.67B
Revenue(TTM)2.48B
Net Income(TTM)-193.00M
Analysts78.89
Price Target17.24 (39.37%)
Short Float %1.11%
Short Ratio1.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.54% |
Yearly Dividend0.29
Dividend Growth(5Y)6.1%
DP-64.77%
Div Incr Years2
Div Non Decr Years2
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)4.59%
PT rev (3m)27.34%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.28%
EPS NY rev (1m)345.64%
EPS NY rev (3m)-21.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 412.33 | ||
| Fwd PE | 41.65 | ||
| P/S | 2.05 | ||
| P/FCF | 14.62 | ||
| P/OCF | 8.08 | ||
| P/B | 3.32 | ||
| P/tB | 6.67 | ||
| EV/EBITDA | 11.3 |
EPS(TTM)0.03
EY0.24%
EPS(NY)0.3
Fwd EY2.4%
FCF(TTM)0.85
FCFY6.84%
OCF(TTM)1.53
OCFY12.38%
SpS6.04
BVpS3.73
TBVpS1.86
PEG (NY)N/A
PEG (5Y)15.39
Graham Number1.59
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 | 0.3 |
F-Score5
WACC6.97%
ROIC/WACC0.36
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-76.78%
EPS Next 2Y-14.26%
EPS Next 3Y-9.5%
EPS Next 5Y22.27%
Revenue 1Y (TTM)-11%
Revenue growth 3Y1.5%
Revenue growth 5Y3.92%
Sales Q2Q%-3.04%
Revenue Next Year-7.03%
Revenue Next 2Y-11.68%
Revenue Next 3Y-7.04%
Revenue Next 5Y-1.63%
EBIT growth 1Y-67.18%
EBIT growth 3Y17%
EBIT growth 5Y12.72%
EBIT Next Year58.24%
EBIT Next 3Y14.67%
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 / TAC FAQ
What is the ChartMill fundamental rating of TRANSALTA CORP (TAC) stock?
ChartMill assigns a fundamental rating of 4 / 10 to TAC.
What is the valuation status of TRANSALTA CORP (TAC) stock?
ChartMill assigns a valuation rating of 3 / 10 to TRANSALTA CORP (TAC). This can be considered as Overvalued.
What is the profitability of TAC stock?
TRANSALTA CORP (TAC) has a profitability rating of 5 / 10.
Can you provide the financial health for TAC stock?
The financial health rating of TRANSALTA CORP (TAC) is 3 / 10.
How sustainable is the dividend of TRANSALTA CORP (TAC) stock?
The dividend rating of TRANSALTA CORP (TAC) is 4 / 10 and the dividend payout ratio is -64.77%.