TRANSALTA CORP (TAC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TAC - CA89346D1078 - Common Stock
14.06 USD
+0.06 (+0.43%)
14.06 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. There are concerns on the financial health of TAC while its profitability can be described as average. TAC has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
TAC had positive earnings in the past year.
TAC had a positive operating cash flow in the past year.
In multiple years TAC reported negative net income over the last 5 years.
TAC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TAC's Return On Assets of -2.17% is on the low side compared to the rest of the industry. TAC is outperformed by 65.00% of its industry peers.
Looking at the Return On Equity, with a value of -12.58%, TAC is doing worse than 65.00% of the companies in the same industry.
The Return On Invested Capital of TAC (2.51%) is comparable to the rest of the industry.
TAC had an Average Return On Invested Capital over the past 3 years of 8.64%. This is above the industry average of 4.56%.
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.
The Operating Margin of TAC (8.62%) is worse than 60.00% of its industry peers.
In the last couple of years the Operating Margin of TAC has grown nicely.
Looking at the Gross Margin, with a value of 83.57%, TAC belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
TAC'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
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.
The number of shares outstanding for TAC has been increased compared to 5 years ago.
TAC has a better debt/assets ratio than last year.
2.2 Solvency
TAC has an Altman-Z score of 0.37. 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 (0.37) is comparable to the rest of the 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 better Debt to FCF ratio (12.69) than 85.00% of its industry peers.
TAC has a Debt/Equity ratio of 2.28. This is a high value indicating a heavy dependency on external financing.
TAC's Debt to Equity ratio of 2.28 is in line compared to the rest of the industry. TAC outperforms 55.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.28 | ||
| Debt/FCF | 12.69 | ||
| Altman-Z | 0.37 |
ROIC/WACC0.36
WACC6.93%
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.
TAC has a Quick 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 Quick ratio of TAC (0.71) is comparable to the rest of the industry.
| 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%.
TAC shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.80% yearly.
TAC shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -11.00%.
Measured over the past years, TAC shows a small growth in Revenue. The Revenue has been growing by 3.92% on average per year.
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.
TAC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.70% yearly.
EPS Next Y-71.72%
EPS Next 2Y-25.75%
EPS Next 3Y-13.76%
EPS Next 5Y22.27%
Revenue Next Year-6.21%
Revenue Next 2Y-12.92%
Revenue Next 3Y-6.56%
Revenue Next 5Y-1.7%
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
TAC is valuated quite expensively with a Price/Earnings ratio of 468.67.
The rest of the industry has a similar Price/Earnings ratio as TAC.
When comparing the Price/Earnings ratio of TAC to the average of the S&P500 Index (26.15), we can say TAC is valued expensively.
With a Price/Forward Earnings ratio of 64.15, TAC can be considered very expensive at the moment.
TAC's Price/Forward Earnings is on the same level as the industry average.
TAC's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 36.12.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 468.67 | ||
| Fwd PE | 64.15 |
4.2 Price Multiples
TAC's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TAC is cheaper than 65.00% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TAC indicates a rather cheap valuation: TAC is cheaper than 85.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.87 | ||
| EV/EBITDA | 12.38 |
4.3 Compensation for Growth
A cheap valuation may be justified as TAC's earnings are expected to decrease with -13.76% in the coming years.
PEG (NY)N/A
PEG (5Y)17.49
EPS Next 2Y-25.75%
EPS Next 3Y-13.76%
5. Dividend
5.1 Amount
TAC has a Yearly Dividend Yield of 1.33%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.61, TAC pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.41, TAC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
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.
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
TAC has negative earnings and hence a negative payout ratio. The dividend may be in danger.
TAC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-64.77%
EPS Next 2Y-25.75%
EPS Next 3Y-13.76%
14.06
+0.06 (+0.43%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryIndependent Power and Renewable Electricity Producers
Earnings (Last)
Earnings (Next)
Inst Owners71.21%
Inst Owner Change0.38%
Ins Owners0.44%
Ins Owner ChangeN/A
Market Cap4.17B
Revenue(TTM)2.48B
Net Income(TTM)-193.00M
Analysts78.95
Price Target16.49 (17.28%)
Short Float %1.16%
Short Ratio1.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.33% |
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)21.75%
PT rev (3m)21.01%
EPS NQ rev (1m)5.29%
EPS NQ rev (3m)11.42%
EPS NY rev (1m)1.65%
EPS NY rev (3m)-34.41%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.97%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 468.67 | ||
| Fwd PE | 64.15 | ||
| P/S | 2.36 | ||
| P/FCF | 16.87 | ||
| P/OCF | 9.32 | ||
| P/B | 3.83 | ||
| P/tB | 7.7 | ||
| EV/EBITDA | 12.38 |
EPS(TTM)0.03
EY0.21%
EPS(NY)0.22
Fwd EY1.56%
FCF(TTM)0.83
FCFY5.93%
OCF(TTM)1.51
OCFY10.73%
SpS5.95
BVpS3.67
TBVpS1.83
PEG (NY)N/A
PEG (5Y)17.49
Graham Number1.57
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 | 0.37 |
F-Score5
WACC6.93%
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-71.72%
EPS Next 2Y-25.75%
EPS Next 3Y-13.76%
EPS Next 5Y22.27%
Revenue 1Y (TTM)-11%
Revenue growth 3Y1.5%
Revenue growth 5Y3.92%
Sales Q2Q%-3.04%
Revenue Next Year-6.21%
Revenue Next 2Y-12.92%
Revenue Next 3Y-6.56%
Revenue Next 5Y-1.7%
EBIT growth 1Y-67.18%
EBIT growth 3Y17%
EBIT growth 5Y12.72%
EBIT Next Year63.68%
EBIT Next 3Y15.38%
EBIT Next 5Y18.02%
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 for 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 expected EPS growth for TAC stock?
The Earnings per Share (EPS) of TRANSALTA CORP (TAC) is expected to decline by -71.72% in the next year.
Is the dividend of TRANSALTA CORP sustainable?
The dividend rating of TRANSALTA CORP (TAC) is 4 / 10 and the dividend payout ratio is -64.77%.