CANADIAN UTILITIES LTD-A (CU.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:CU - CA1367178326 - Common Stock
44.29 CAD
+0.43 (+0.98%)
CU gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 19 industry peers in the Multi-Utilities industry. There are concerns on the financial health of CU while its profitability can be described as average. CU has a expensive valuation and it also scores bad on growth. Finally CU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- CU had positive earnings in the past year.
- CU had a positive operating cash flow in the past year.
- CU had positive earnings in each of the past 5 years.
- CU had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- CU has a Return On Assets (2.16%) which is comparable to the rest of the industry.
- CU has a Return On Equity (7.68%) which is comparable to the rest of the industry.
- CU has a worse Return On Invested Capital (3.86%) than 68.42% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for CU is in line with the industry average of 3.73%.
- The last Return On Invested Capital (3.86%) for CU is above the 3 year average (3.80%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.16% | ||
| ROE | 7.68% | ||
| ROIC | 3.86% |
ROA(3y)2.32%
ROA(5y)2.06%
ROE(3y)7.67%
ROE(5y)6.68%
ROIC(3y)3.8%
ROIC(5y)3.75%
1.3 Margins
- CU has a Profit Margin of 14.43%. This is comparable to the rest of the industry: CU outperforms 47.37% of its industry peers.
- In the last couple of years the Profit Margin of CU has declined.
- CU has a Operating Margin (31.51%) which is comparable to the rest of the industry.
- In the last couple of years the Operating Margin of CU has declined.
- CU has a Gross Margin (88.73%) which is in line with its industry peers.
- In the last couple of years the Gross Margin of CU has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.51% | ||
| PM (TTM) | 14.43% | ||
| GM | 88.73% |
OM growth 3Y1.06%
OM growth 5Y-4.58%
PM growth 3Y4.89%
PM growth 5Y-13.81%
GM growth 3Y1.25%
GM growth 5Y0.22%
2. Health
2.1 Basic Checks
- CU has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- CU has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for CU has been reduced compared to 5 years ago.
- The debt/assets ratio for CU is higher compared to a year ago.
2.2 Solvency
- CU has an Altman-Z score of 0.87. This is a bad value and indicates that CU is not financially healthy and even has some risk of bankruptcy.
- CU's Altman-Z score of 0.87 is amongst the best of the industry. CU outperforms 89.47% of its industry peers.
- CU has a debt to FCF ratio of 34.08. This is a negative value and a sign of low solvency as CU would need 34.08 years to pay back of all of its debts.
- CU has a Debt to FCF ratio of 34.08. This is comparable to the rest of the industry: CU outperforms 52.63% of its industry peers.
- CU has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
- CU has a Debt to Equity ratio (1.68) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 34.08 | ||
| Altman-Z | 0.87 |
ROIC/WACC0.69
WACC5.63%
2.3 Liquidity
- CU has a Current Ratio of 1.56. This is a normal value and indicates that CU is financially healthy and should not expect problems in meeting its short term obligations.
- CU has a Current ratio of 1.56. This is comparable to the rest of the industry: CU outperforms 52.63% of its industry peers.
- CU has a Quick Ratio of 1.48. This is a normal value and indicates that CU is financially healthy and should not expect problems in meeting its short term obligations.
- CU has a Quick ratio of 1.48. This is comparable to the rest of the industry: CU outperforms 52.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.56 | ||
| Quick Ratio | 1.48 |
3. Growth
3.1 Past
- CU shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.13%.
- The Earnings Per Share has been growing slightly by 0.09% on average over the past years.
- Looking at the last year, CU shows a decrease in Revenue. The Revenue has decreased by -0.94% in the last year.
- The Revenue has been decreasing by -0.85% on average over the past years.
EPS 1Y (TTM)-2.13%
EPS 3Y1.06%
EPS 5Y0.09%
EPS Q2Q%5.26%
Revenue 1Y (TTM)-0.94%
Revenue growth 3Y2.11%
Revenue growth 5Y-0.85%
Sales Q2Q%-2.22%
3.2 Future
- The Earnings Per Share is expected to grow by 5.88% on average over the next years.
- The Revenue is expected to grow by 1.45% on average over the next years.
EPS Next Y11.35%
EPS Next 2Y7.18%
EPS Next 3Y6.77%
EPS Next 5Y5.88%
Revenue Next Year-4.75%
Revenue Next 2Y-0.31%
Revenue Next 3Y1.45%
Revenue Next 5YN/A
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 19.26, which indicates a rather expensive current valuation of CU.
- The rest of the industry has a similar Price/Earnings ratio as CU.
- CU is valuated rather cheaply when we compare the Price/Earnings ratio to 28.60, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 17.21 indicates a rather expensive valuation of CU.
- The rest of the industry has a similar Price/Forward Earnings ratio as CU.
- When comparing the Price/Forward Earnings ratio of CU to the average of the S&P500 Index (25.83), we can say CU is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.26 | ||
| Fwd PE | 17.21 |
4.2 Price Multiples
- 73.68% of the companies in the same industry are cheaper than CU, based on the Enterprise Value to EBITDA ratio.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of CU is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.69 | ||
| EV/EBITDA | 10.93 |
4.3 Compensation for Growth
- CU's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.7
PEG (5Y)215.1
EPS Next 2Y7.18%
EPS Next 3Y6.77%
5. Dividend
5.1 Amount
- CU has a Yearly Dividend Yield of 4.20%, which is a nice return.
- CU's Dividend Yield is comparable with the industry average which is at 5.19.
- CU's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.2% |
5.2 History
- The dividend of CU has a limited annual growth rate of 0.91%.
- CU has paid a dividend for at least 10 years, which is a reliable track record.
- CU has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.91%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- 107.49% of the earnings are spent on dividend by CU. This is not a sustainable payout ratio.
- CU's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP107.49%
EPS Next 2Y7.18%
EPS Next 3Y6.77%
CANADIAN UTILITIES LTD-A / CU.CA FAQ
Can you provide the ChartMill fundamental rating for CANADIAN UTILITIES LTD-A?
ChartMill assigns a fundamental rating of 3 / 10 to CU.CA.
What is the valuation status for CU stock?
ChartMill assigns a valuation rating of 2 / 10 to CANADIAN UTILITIES LTD-A (CU.CA). This can be considered as Overvalued.
What is the profitability of CU stock?
CANADIAN UTILITIES LTD-A (CU.CA) has a profitability rating of 4 / 10.
What is the valuation of CANADIAN UTILITIES LTD-A based on its PE and PB ratios?
The Price/Earnings (PE) ratio for CANADIAN UTILITIES LTD-A (CU.CA) is 19.26 and the Price/Book (PB) ratio is 1.31.
Is the dividend of CANADIAN UTILITIES LTD-A sustainable?
The dividend rating of CANADIAN UTILITIES LTD-A (CU.CA) is 7 / 10 and the dividend payout ratio is 107.49%.