ALTAGAS LTD (ALA.CA) Stock Fundamental Analysis
TSX:ALA - Toronto Stock Exchange - CA0213611001 - Common Stock - Currency: CAD
We assign a fundamental rating of 3 out of 10 to ALA. ALA was compared to 8 industry peers in the Gas Utilities industry. There are concerns on the financial health of ALA while its profitability can be described as average. While showing a medium growth rate, ALA is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year ALA was profitable.
In the past year ALA had a positive cash flow from operations.
Each year in the past 5 years ALA has been profitable.
Each year in the past 5 years ALA had a positive operating cash flow.
1.2 Ratios
ALA has a Return On Assets of 2.15%. This is in the better half of the industry: ALA outperforms 62.50% of its industry peers.
ALA has a Return On Equity of 6.18%. This is in the better half of the industry: ALA outperforms 62.50% of its industry peers.
With a Return On Invested Capital value of 3.44%, ALA is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
Measured over the past 3 years, the Average Return On Invested Capital for ALA is in line with the industry average of 4.39%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.15% | ||
| ROE | 6.18% | ||
| ROIC | 3.44% |
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 better Profit Margin (4.40%) than 62.50% of its industry peers.
In the last couple of years the Profit Margin of ALA has declined.
ALA has a worse Operating Margin (7.97%) than 62.50% of its industry peers.
In the last couple of years the Operating Margin of ALA has grown nicely.
The Gross Margin of ALA (25.65%) is worse than 75.00% of its industry peers.
ALA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 7.97% | ||
| PM (TTM) | 4.4% | ||
| GM | 25.65% |
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 is destroying value.
The number of shares outstanding for ALA has been increased compared to 1 year ago.
Compared to 5 years ago, ALA has more shares outstanding
Compared to 1 year ago, ALA has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.00, we must say that ALA is in the distress zone and has some risk of bankruptcy.
ALA has a Altman-Z score of 1.00. This is amongst the best in the industry. ALA outperforms 100.00% of its industry peers.
The Debt to FCF ratio of ALA is 68.55, which is on the high side as it means it would take ALA, 68.55 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ALA (68.55) is worse than 75.00% of its industry peers.
ALA has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ALA (1.02) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 68.55 | ||
| Altman-Z | 1 |
ROIC/WACC0.59
WACC5.87%
2.3 Liquidity
ALA has a Current Ratio of 0.95. This is a bad value and indicates that ALA is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of ALA (0.95) is comparable to the rest of the industry.
A Quick Ratio of 0.78 indicates that ALA may have some problems paying its short term obligations.
With a Quick ratio value of 0.78, ALA is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 6.34% over the past year.
The Earnings Per Share has been growing by 13.25% on average over the past years. This is quite good.
The Revenue has been growing slightly by 1.25% in the past year.
Measured over the past years, ALA shows a quite strong growth in Revenue. The Revenue has been growing by 17.77% on average per year.
EPS 1Y (TTM)6.34%
EPS 3Y7.19%
EPS 5Y13.25%
EPS Q2Q%0%
Revenue 1Y (TTM)1.25%
Revenue growth 3Y5.59%
Revenue growth 5Y17.77%
Sales Q2Q%8.59%
3.2 Future
Based on estimates for the next years, ALA will show a decrease in Earnings Per Share. The EPS will decrease by -3.68% on average per year.
Based on estimates for the next years, ALA will show a small growth in Revenue. The Revenue will grow by 5.25% on average per year.
EPS Next Y3.64%
EPS Next 2Y5.73%
EPS Next 3Y8.15%
EPS Next 5Y-3.68%
Revenue Next Year2.66%
Revenue Next 2Y5.32%
Revenue Next 3Y5.25%
Revenue Next 5YN/A
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 decreasing.
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
The Price/Earnings ratio is 17.98, which indicates a rather expensive current valuation of ALA.
ALA's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.30, ALA is valued a bit cheaper.
A Price/Forward Earnings ratio of 16.09 indicates a correct valuation of ALA.
ALA's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. ALA is more expensive than 62.50% of the companies in the same industry.
ALA's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.98 | ||
| Fwd PE | 16.09 |
4.2 Price Multiples
ALA's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. ALA is more expensive than 75.00% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ALA is valued a bit more expensive than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 81.36 | ||
| EV/EBITDA | 14.18 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ALA does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)4.94
PEG (5Y)1.36
EPS Next 2Y5.73%
EPS Next 3Y8.15%
5. Dividend
5.1 Amount
ALA has a Yearly Dividend Yield of 3.28%.
ALA's Dividend Yield is rather good when compared to the industry average which is at 3.27. ALA pays more dividend than 87.50% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, ALA pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
5.2 History
The dividend of ALA has a limited annual growth rate of 0.74%.
ALA has been paying a dividend for at least 10 years, so it has a reliable track record.
As ALA did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)0.74%
Div Incr Years5
Div Non Decr Years5
5.3 Sustainability
67.26% of the earnings are spent on dividend by ALA. This is not a sustainable payout ratio.
The Dividend Rate of ALA has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP67.26%
EPS Next 2Y5.73%
EPS Next 3Y8.15%
TSX:ALA (7/11/2025, 7:00:00 PM)
39.2
+0.17 (+0.44%)
Chartmill FA Rating
GICS SectorUtilities
GICS IndustryGroupUtilities
GICS IndustryGas Utilities
Earnings (Last)
Earnings (Next)
Inst Owners36.37%
Inst Owner ChangeN/A
Ins Owners0.65%
Ins Owner ChangeN/A
Market Cap11.72B
Analysts74.67
Price Target42.16 (7.55%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.28% |
Yearly Dividend1.25
Dividend Growth(5Y)0.74%
DP67.26%
Div Incr Years5
Div Non Decr Years5
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.83%
Min EPS beat(2)-0.52%
Max EPS beat(2)6.18%
EPS beat(4)3
Avg EPS beat(4)20.88%
Min EPS beat(4)-0.52%
Max EPS beat(4)54.51%
EPS beat(8)5
Avg EPS beat(8)9.34%
EPS beat(12)7
Avg EPS beat(12)4.91%
EPS beat(16)10
Avg EPS beat(16)253.91%
Revenue beat(2)1
Avg Revenue beat(2)0.91%
Min Revenue beat(2)-6.22%
Max Revenue beat(2)8.03%
Revenue beat(4)2
Avg Revenue beat(4)-1.04%
Min Revenue beat(4)-14.32%
Max Revenue beat(4)8.36%
Revenue beat(8)2
Avg Revenue beat(8)-8.16%
Revenue beat(12)5
Avg Revenue beat(12)20.24%
Revenue beat(16)9
Avg Revenue beat(16)46.06%
PT rev (1m)0%
PT rev (3m)4.79%
EPS NQ rev (1m)0.31%
EPS NQ rev (3m)-0.87%
EPS NY rev (1m)0%
EPS NY rev (3m)0.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.98 | ||
| Fwd PE | 16.09 | ||
| P/S | 0.92 | ||
| P/FCF | 81.36 | ||
| P/OCF | 7.29 | ||
| P/B | 1.29 | ||
| P/tB | 3.54 | ||
| EV/EBITDA | 14.18 |
EPS(TTM)2.18
EY5.56%
EPS(NY)2.44
Fwd EY6.22%
FCF(TTM)0.48
FCFY1.23%
OCF(TTM)5.38
OCFY13.73%
SpS42.7
BVpS30.43
TBVpS11.06
PEG (NY)4.94
PEG (5Y)1.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.15% | ||
| ROE | 6.18% | ||
| ROCE | 4.38% | ||
| ROIC | 3.44% | ||
| ROICexc | 3.47% | ||
| ROICexgc | 4.64% | ||
| OM | 7.97% | ||
| PM (TTM) | 4.4% | ||
| GM | 25.65% | ||
| FCFM | 1.13% |
ROA(3y)2.2%
ROA(5y)1.99%
ROE(3y)6.76%
ROE(5y)6.1%
ROIC(3y)3.44%
ROIC(5y)3.31%
ROICexc(3y)3.46%
ROICexc(5y)3.32%
ROICexgc(3y)4.67%
ROICexgc(5y)4.54%
ROCE(3y)4.43%
ROCE(5y)4.26%
ROICexcg growth 3Y-2.78%
ROICexcg growth 5Y46.91%
ROICexc growth 3Y-1.67%
ROICexc growth 5Y47.33%
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%
F-Score5
Asset Turnover0.49
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 68.55 | ||
| Debt/EBITDA | 6.18 | ||
| Cap/Depr | 300.62% | ||
| Cap/Sales | 11.47% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 106.92% | ||
| Profit Quality | 25.62% | ||
| Current Ratio | 0.95 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z | 1 |
F-Score5
WACC5.87%
ROIC/WACC0.59
Cap/Depr(3y)241.49%
Cap/Depr(5y)224.2%
Cap/Sales(3y)8.4%
Cap/Sales(5y)9.6%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)6.34%
EPS 3Y7.19%
EPS 5Y13.25%
EPS Q2Q%0%
EPS Next Y3.64%
EPS Next 2Y5.73%
EPS Next 3Y8.15%
EPS Next 5Y-3.68%
Revenue 1Y (TTM)1.25%
Revenue growth 3Y5.59%
Revenue growth 5Y17.77%
Sales Q2Q%8.59%
Revenue Next Year2.66%
Revenue Next 2Y5.32%
Revenue Next 3Y5.25%
Revenue Next 5YN/A
EBIT growth 1Y-5.4%
EBIT growth 3Y4.37%
EBIT growth 5Y56.06%
EBIT Next Year42.74%
EBIT Next 3Y16.7%
EBIT Next 5Y10.8%
FCF growth 1Y126.92%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y260.54%
OCF growth 3Y27.73%
OCF growth 5Y19.91%