ALTAGAS LTD (ALA.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:ALA - CA0213611001 - Common Stock
40.75 CAD
-0.25 (-0.61%)
Taking everything into account, ALA scores 5 out of 10 in our fundamental rating. ALA was compared to 6 industry peers in the Gas Utilities industry. There are concerns on the financial health of ALA while its profitability can be described as average. ALA has a correct valuation and a medium growth rate. Finally ALA also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- ALA had positive earnings in the past year.
- ALA had a positive operating cash flow in the past year.
- Each year in the past 5 years ALA has been profitable.
- In the past 5 years ALA always reported a positive cash flow from operatings.
1.2 Ratios
- ALA's Return On Assets of 2.87% is amongst the best of the industry. ALA outperforms 83.33% of its industry peers.
- ALA has a better Return On Equity (8.75%) than 83.33% of its industry peers.
- ALA's Return On Invested Capital of 4.37% is in line compared to the rest of the industry. ALA outperforms 50.00% of its industry peers.
- ALA had an Average Return On Invested Capital over the past 3 years of 3.44%. This is in line with the industry average of 5.31%.
- The 3 year average ROIC (3.44%) for ALA is below the current ROIC(4.37%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.87% | ||
| ROE | 8.75% | ||
| ROIC | 4.37% |
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
- ALA has a Profit Margin of 5.88%. This is amongst the best in the industry. ALA outperforms 83.33% of its industry peers.
- In the last couple of years the Profit Margin of ALA has declined.
- The Operating Margin of ALA (10.21%) is comparable to the rest of the industry.
- ALA's Operating Margin has improved in the last couple of years.
- ALA has a worse Gross Margin (28.43%) than 66.67% of its industry peers.
- ALA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.21% | ||
| PM (TTM) | 5.88% | ||
| GM | 28.43% |
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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ALA is destroying value.
- The number of shares outstanding for ALA has been increased compared to 1 year ago.
- The number of shares outstanding for ALA has been increased compared to 5 years ago.
- ALA has a better debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.05, we must say that ALA is in the distress zone and has some risk of bankruptcy.
- ALA has a better Altman-Z score (1.05) than 100.00% of its industry peers.
- The Debt to FCF ratio of ALA is 2558.25, which is on the high side as it means it would take ALA, 2558.25 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of ALA (2558.25) is better than 66.67% of its industry peers.
- ALA has a Debt/Equity ratio of 1.15. This is a high value indicating a heavy dependency on external financing.
- ALA has a Debt to Equity ratio of 1.15. This is comparable to the rest of the industry: ALA outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 2558.25 | ||
| Altman-Z | 1.05 |
ROIC/WACC0.72
WACC6.05%
2.3 Liquidity
- A Current Ratio of 0.88 indicates that ALA may have some problems paying its short term obligations.
- The Current ratio of ALA (0.88) is better than 66.67% of its industry peers.
- A Quick Ratio of 0.63 indicates that ALA may have some problems paying its short term obligations.
- ALA has a Quick ratio (0.63) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.88 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
- ALA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.84%.
- ALA shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 13.25% yearly.
- Looking at the last year, ALA shows a small growth in Revenue. The Revenue has grown by 1.55% in the last year.
- The Revenue has been growing by 17.77% on average over the past years. This is quite good.
EPS 1Y (TTM)1.84%
EPS 3Y7.19%
EPS 5Y13.25%
EPS Q2Q%-71.43%
Revenue 1Y (TTM)1.55%
Revenue growth 3Y5.59%
Revenue growth 5Y17.77%
Sales Q2Q%-5.84%
3.2 Future
- ALA is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.90% yearly.
- ALA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.83% yearly.
EPS Next Y3.27%
EPS Next 2Y3.85%
EPS Next 3Y7.01%
EPS Next 5Y6.9%
Revenue Next Year1.92%
Revenue Next 2Y3.98%
Revenue Next 3Y4.83%
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.
- 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
- A Price/Earnings ratio of 18.44 indicates a rather expensive valuation of ALA.
- 66.67% of the companies in the same industry are more expensive than ALA, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 27.32, ALA is valued a bit cheaper.
- ALA is valuated rather expensively with a Price/Forward Earnings ratio of 17.33.
- The rest of the industry has a similar Price/Forward Earnings ratio as ALA.
- ALA is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.44 | ||
| Fwd PE | 17.33 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ALA is valued a bit more expensive than the industry average as 66.67% of the companies are valued more cheaply.
- Based on the Price/Free Cash Flow ratio, ALA is valued a bit cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3169.33 | ||
| EV/EBITDA | 12.7 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- ALA has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.65
PEG (5Y)1.39
EPS Next 2Y3.85%
EPS Next 3Y7.01%
5. Dividend
5.1 Amount
- ALA has a Yearly Dividend Yield of 5.86%, which is a nice return.
- ALA's Dividend Yield is rather good when compared to the industry average which is at 3.03. ALA pays more dividend than 100.00% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, ALA pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.86% |
5.2 History
- The dividend of ALA has a limited annual growth rate of 0.74%.
- ALA has paid a dividend for at least 10 years, which is a reliable track record.
- ALA has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)0.74%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
- 52.48% of the earnings are spent on dividend by ALA. This is a bit on the high side, but may be sustainable.
- ALA's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP52.48%
EPS Next 2Y3.85%
EPS Next 3Y7.01%
ALTAGAS LTD / ALA.CA FAQ
What is the fundamental rating for ALA stock?
ChartMill assigns a fundamental rating of 5 / 10 to ALA.CA.
Can you provide the valuation status for ALTAGAS LTD?
ChartMill assigns a valuation rating of 4 / 10 to ALTAGAS LTD (ALA.CA). This can be considered as Fairly Valued.
Can you provide the profitability details for ALTAGAS LTD?
ALTAGAS LTD (ALA.CA) has a profitability rating of 6 / 10.
Can you provide the PE and PB ratios for ALA stock?
The Price/Earnings (PE) ratio for ALTAGAS LTD (ALA.CA) is 18.44 and the Price/Book (PB) ratio is 1.49.
How sustainable is the dividend of ALTAGAS LTD (ALA.CA) stock?
The dividend rating of ALTAGAS LTD (ALA.CA) is 8 / 10 and the dividend payout ratio is 52.48%.