ALTAGAS LTD - ALACN 5.08 PERP (ALA-PR-B.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:ALA-PR-B - CA0213613080
24.98 CAD
+0.01 (+0.04%)
We assign a fundamental rating of 5 out of 10 to ALA-PR-B. ALA-PR-B was compared to 6 industry peers in the Gas Utilities industry. While ALA-PR-B has a great profitability rating, there are some minor concerns on its financial health. ALA-PR-B is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- ALA-PR-B had positive earnings in the past year.
- ALA-PR-B had a positive operating cash flow in the past year.
- Each year in the past 5 years ALA-PR-B has been profitable.
- ALA-PR-B had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of ALA-PR-B (3.08%) is better than 100.00% of its industry peers.
- The Return On Equity of ALA-PR-B (9.04%) is better than 100.00% of its industry peers.
- The Return On Invested Capital of ALA-PR-B (4.39%) is better than 75.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for ALA-PR-B is in line with the industry average of 5.31%.
- The last Return On Invested Capital (4.39%) for ALA-PR-B is above the 3 year average (3.44%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.08% | ||
| ROE | 9.04% | ||
| ROIC | 4.39% |
ROA(3y)2.2%
ROA(5y)1.99%
ROE(3y)6.76%
ROE(5y)6.1%
ROIC(3y)3.44%
ROIC(5y)3.31%
1.3 Margins
- The Profit Margin of ALA-PR-B (6.07%) is better than 100.00% of its industry peers.
- In the last couple of years the Profit Margin of ALA-PR-B has declined.
- Looking at the Operating Margin, with a value of 9.88%, ALA-PR-B is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
- ALA-PR-B's Operating Margin has improved in the last couple of years.
- ALA-PR-B has a better Gross Margin (27.70%) than 62.50% of its industry peers.
- In the last couple of years the Gross Margin of ALA-PR-B has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.88% | ||
| PM (TTM) | 6.07% | ||
| GM | 27.7% |
OM growth 3Y-1.16%
OM growth 5Y32.51%
PM growth 3Y28.76%
PM growth 5Y-19.79%
GM growth 3Y-1.26%
GM growth 5Y-8.77%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ALA-PR-B is destroying value.
- ALA-PR-B has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for ALA-PR-B has been increased compared to 5 years ago.
- The debt/assets ratio for ALA-PR-B has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.93, we must say that ALA-PR-B is in the distress zone and has some risk of bankruptcy.
- The Altman-Z score of ALA-PR-B (0.93) is better than 62.50% of its industry peers.
- ALA-PR-B has a debt to FCF ratio of 1624.33. This is a negative value and a sign of low solvency as ALA-PR-B would need 1624.33 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 1624.33, ALA-PR-B is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
- A Debt/Equity ratio of 1.08 is on the high side and indicates that ALA-PR-B has dependencies on debt financing.
- ALA-PR-B's Debt to Equity ratio of 1.08 is amongst the best of the industry. ALA-PR-B outperforms 87.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.08 | ||
| Debt/FCF | 1624.33 | ||
| Altman-Z | 0.93 |
ROIC/WACC0.8
WACC5.47%
2.3 Liquidity
- ALA-PR-B has a Current Ratio of 0.96. This is a bad value and indicates that ALA-PR-B is not financially healthy enough and could expect problems in meeting its short term obligations.
- ALA-PR-B has a Current ratio of 0.96. This is amongst the best in the industry. ALA-PR-B outperforms 87.50% of its industry peers.
- A Quick Ratio of 0.74 indicates that ALA-PR-B may have some problems paying its short term obligations.
- With a decent Quick ratio value of 0.74, ALA-PR-B is doing good in the industry, outperforming 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.96 | ||
| Quick Ratio | 0.74 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.45% over the past year.
- ALA-PR-B shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.25% yearly.
- The Revenue has been growing slightly by 0.65% in the past year.
- ALA-PR-B shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.77% yearly.
EPS 1Y (TTM)8.45%
EPS 3Y7.19%
EPS 5Y13.25%
EPS Q2Q%92.86%
Revenue 1Y (TTM)0.65%
Revenue growth 3Y5.59%
Revenue growth 5Y17.77%
Sales Q2Q%2.49%
3.2 Future
- The Earnings Per Share is expected to grow by 0.17% on average over the next years.
- Based on estimates for the next years, ALA-PR-B will show a small growth in Revenue. The Revenue will grow by 3.46% on average per year.
EPS Next Y4.45%
EPS Next 2Y5.69%
EPS Next 3Y8.25%
EPS Next 5Y0.17%
Revenue Next Year0.62%
Revenue Next 2Y2.75%
Revenue Next 3Y3.46%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less 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
- Based on the Price/Earnings ratio of 10.81, the valuation of ALA-PR-B can be described as reasonable.
- Based on the Price/Earnings ratio, ALA-PR-B is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.
- ALA-PR-B is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 10.26, the valuation of ALA-PR-B can be described as very reasonable.
- 87.50% of the companies in the same industry are more expensive than ALA-PR-B, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. ALA-PR-B is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.81 | ||
| Fwd PE | 10.26 |
4.2 Price Multiples
- ALA-PR-B's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ALA-PR-B is cheaper than 62.50% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ALA-PR-B indicates a somewhat cheap valuation: ALA-PR-B is cheaper than 75.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 1246.79 | ||
| EV/EBITDA | 9.58 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of ALA-PR-B may justify a higher PE ratio.
PEG (NY)2.43
PEG (5Y)0.82
EPS Next 2Y5.69%
EPS Next 3Y8.25%
5. Dividend
5.1 Amount
- ALA-PR-B has a Yearly Dividend Yield of 2.92%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 3.03, ALA-PR-B has a dividend in line with its industry peers.
- ALA-PR-B's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.92% |
5.2 History
- The dividend of ALA-PR-B has a limited annual growth rate of 0.74%.
- ALA-PR-B has been paying a dividend for at least 10 years, so it has a reliable track record.
- ALA-PR-B has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)0.74%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
- 49.55% of the earnings are spent on dividend by ALA-PR-B. This is a bit on the high side, but may be sustainable.
- The dividend of ALA-PR-B is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP49.55%
EPS Next 2Y5.69%
EPS Next 3Y8.25%
ALTAGAS LTD - ALACN 5.08 PERP / ALA-PR-B.CA FAQ
Can you provide the ChartMill fundamental rating for ALTAGAS LTD - ALACN 5.08 PERP?
ChartMill assigns a fundamental rating of 6 / 10 to ALA-PR-B.CA.
Can you provide the valuation status for ALTAGAS LTD - ALACN 5.08 PERP?
ChartMill assigns a valuation rating of 7 / 10 to ALTAGAS LTD - ALACN 5.08 PERP (ALA-PR-B.CA). This can be considered as Undervalued.
How profitable is ALTAGAS LTD - ALACN 5.08 PERP (ALA-PR-B.CA) stock?
ALTAGAS LTD - ALACN 5.08 PERP (ALA-PR-B.CA) has a profitability rating of 8 / 10.
What is the valuation of ALTAGAS LTD - ALACN 5.08 PERP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ALTAGAS LTD - ALACN 5.08 PERP (ALA-PR-B.CA) is 10.81 and the Price/Book (PB) ratio is 0.87.
Can you provide the dividend sustainability for ALA-PR-B stock?
The dividend rating of ALTAGAS LTD - ALACN 5.08 PERP (ALA-PR-B.CA) is 5 / 10 and the dividend payout ratio is 49.55%.