TSX:ACO.X

Stock Analysis Report

Executive Summary

ATCO Ltd., together with its subsidiaries, engages in the electricity, pipeline and liquid, and retail energy businesses in Canada, Australia, and internationally.

Snowflake

Fundamentals

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has ATCO's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

3.1%

TSX:ACO.X

1.2%

CA Integrated Utilities

1.0%

CA Market


1 Year Return

17.7%

TSX:ACO.X

15.2%

CA Integrated Utilities

-5.0%

CA Market

ACO.X outperformed the Integrated Utilities industry which returned 15.3% over the past year.

ACO.X outperformed the Market in Canada which returned -4.1% over the past year.


Share holder returns

ACO.XIndustryMarket
7 Day3.1%1.2%1.0%
30 Day9.4%2.2%-2.8%
90 Day2.7%2.4%-1.7%
1 Year22.1%17.7%19.4%15.2%-1.7%-5.0%
3 Year4.8%-4.8%36.1%22.3%14.7%4.4%
5 Year15.2%-0.3%69.1%36.4%12.5%-3.3%

Price Volatility Vs. Market

How volatile is ATCO's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is ATCO undervalued based on future cash flows and its price relative to the stock market?

46%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

ATCO's share price is below the future cash flow value, and at a moderate discount (> 20%).

ATCO's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

ATCO is good value based on earnings compared to the North America Integrated Utilities industry average.

ATCO is good value based on earnings compared to the Canada market.


Price Based on Expected Growth

ATCO earnings are not expected to grow next year, we can't assess if its growth is good value.


Price Based on Value of Assets

ATCO is good value based on assets compared to the North America Integrated Utilities industry average.


Next Steps

Future Growth

How is ATCO expected to perform in the next 1 to 3 years based on estimates from 6 analysts?

-8.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

ATCO's revenue is expected to grow by 2.4% yearly, however this is not considered high growth (20% yearly).

ATCO's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.

ATCO's revenue growth is positive but not above the Canada market average.

ATCO's earnings are expected to decrease over the next 1-3 years, this is below the Canada market average.

ATCO's earnings are expected to decrease over the next 1-3 years, this is below the low risk savings rate of 1.9%.


Earnings per Share Growth Estimates


Future Return on Equity

ATCO is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has ATCO performed over the past 5 years?

-2.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

ATCO's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

ATCO's 1-year earnings growth exceeds its 5-year average (235.5% vs -2.5%)

ATCO's earnings growth has exceeded the North America Integrated Utilities industry average in the past year (235.5% vs -2.5%).


Return on Equity

ATCO has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

ATCO used its assets less efficiently than the North America Integrated Utilities industry average last year based on Return on Assets.


Return on Capital Employed

ATCO has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is ATCO's financial position?


Financial Position Analysis

ATCO is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

ATCO's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

ATCO's level of debt (128.4%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (116.1% vs 128.4% today).

Debt is not well covered by operating cash flow (13.5%, less than 20% of total debt).

Interest payments on debt are not well covered by earnings (EBIT is 2.8x annual interest expense, ideally 3x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is not covered by short term assets, assets are 0.4x debt.


Next Steps

Dividend

What is ATCO's current dividend yield, its reliability and sustainability?

3.58%

Expected Dividend Yield


Upcoming Dividend Payment

Purchase ATCO before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield and Payments Analysis

ATCO's pays a higher dividend yield than the bottom 25% of dividend payers in Canada (1.99%).

ATCO's dividend is below the markets top 25% of dividend payers in Canada (5.97%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (2.9x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.8x coverage).


Next Steps

Management

What is the CEO of ATCO's salary, the management and board of directors tenure and is there insider trading?

2.9yrs

Average management tenure


CEO

Nancy Southern (62yo)

19.6yrs

Tenure

CA$4,842,756

Compensation

Ms. Nancy C. Southern has been the Chief Executive Officer of ATCO Ltd. since January 2000. Ms. Southern served as the Chief Executive Officer at Canadian Utilities Ltd. from January 01, 2003 to May 8, 201 ...


CEO Compensation Analysis

Nancy's remuneration is about average for companies of similar size in Canada.

Nancy's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

2.9yrs

Average Tenure

58.5yo

Average Age

The tenure for the ATCO management team is about average.


Board Age and Tenure

6.0yrs

Average Tenure

69yo

Average Age

The tenure for the ATCO board of directors is about average.


Insider Trading

ATCO individual insiders have only sold shares in the past 3 months, but not in substantial volumes.


Recent Insider Transactions

BuyCA$1,872,33118 Aug 19
Sentgraf Enterprises Ltd.
EntityCompany
Shares41,100
Max PriceCA$45.56
BuyCA$1,574,41413 Aug 19
Sentgraf Enterprises Ltd.
EntityCompany
Shares35,000
Max PriceCA$45.15
SellCA$27,41428 May 19
Adam Beattie
EntityIndividual
Role
Senior Key Executive
President of Structures
Shares600
Max PriceCA$45.69
SellCA$72,64803 May 19
P. Cook
EntityIndividual
Shares1,606
Max PriceCA$45.24
SellCA$64,67602 May 19
P. Cook
EntityIndividual
Shares1,506
Max PriceCA$43.26
SellCA$96,82710 Apr 19
Settimio Policicchio
EntityIndividual
Shares2,129
Max PriceCA$45.48
BuyCA$77203 Apr 19
Loraine Charlton
EntityIndividual
Shares17
Max PriceCA$45.44
SellCA$21,72729 Mar 19
George Lidgett
EntityIndividual
Role
Senior Key Executive
Managing Director of Pipelines & Liquids Global Business Unit
Shares479
Max PriceCA$45.36
SellCA$43,50029 Mar 19
P. Cook
EntityIndividual
Shares959
Max PriceCA$45.36
SellCA$35,09929 Mar 19
Wayne Stensby
EntityIndividual
Role
Senior Key Executive
Managing Director of Electricity Global Business Unit
Shares959
Max PriceCA$36.60
SellCA$43,50029 Mar 19
Clinton Warkentin
EntityIndividual
Shares959
Max PriceCA$45.36
SellCA$122,93929 Mar 19
Siegfried Kiefer
EntityIndividual
Role
President
President
Shares3,359
Max PriceCA$36.60
SellCA$51,92207 Mar 19
Brian Shkrobot
EntityIndividual
Shares1,150
Max PriceCA$45.15
BuyCA$7725 Jan 19
Katie Patrick
EntityIndividual
Shares2
Max PriceCA$39.28
BuyCA$41302 Jan 19
Robert Francis
EntityIndividual
Shares11
Max PriceCA$37.55
BuyCA$71302 Jan 19
Loraine Charlton
EntityIndividual
Shares19
Max PriceCA$37.55
SellCA$19,01930 Nov 18
Anthony Maher
EntityIndividual
Shares473
Max PriceCA$40.23
SellCA$23,88019 Nov 18
Anthony Maher
EntityIndividual
Shares600
Max PriceCA$39.80
SellCA$16,88517 Oct 18
Anthony Maher
EntityIndividual
Shares479
Max PriceCA$35.25
BuyCA$40910 Oct 18
Robert Francis
EntityIndividual
Shares11
Max PriceCA$37.21
BuyCA$70710 Oct 18
Loraine Charlton
EntityIndividual
Shares19
Max PriceCA$37.21
SellCA$36,68424 Sep 18
M Reeve
EntityIndividual
Shares971
Max PriceCA$37.78
SellCA$9,00119 Sep 18
Katie Patrick
EntityIndividual
Shares235
Max PriceCA$38.30

Ownership Breakdown


Management Team

  • Nancy Southern (62yo)

    Chair & CEO

    • Tenure: 19.6yrs
    • Compensation: CA$4.84m
  • Siegfried Kiefer (60yo)

    President

    • Tenure: 0.6yrs
    • Compensation: CA$3.02m
  • Brian Bale (64yo)

    Senior VP of IT & Real Estate and Special Advisor to the CEO

    • Tenure: 0.0yrs
    • Compensation: CA$573.52k
  • Donna Pincott

    Director of Corporate Communications

    • Tenure: 0.0yrs
  • Dennis DeChamplain (55yo)

    Senior VP & CFO

    • Tenure: 2.2yrs
    • Compensation: CA$1.29m
  • George Lidgett (57yo)

    Managing Director of Pipelines & Liquids Global Business Unit

    • Tenure: 3.7yrs
    • Compensation: CA$1.55m
  • Pat Creaghan

    Managing Director of Australian Operations & Chief Operating Officer of Australian Operations

    • Tenure: 2.2yrs
  • Myles Dougan

    Senior Manager of Investor Relations

    • Tenure: 0.0yrs
  • Wayne Stensby (52yo)

    Managing Director of Electricity Global Business Unit

    • Tenure: 3.7yrs
    • Compensation: CA$1.40m
  • Adam Beattie

    President of Structures

    • Tenure: 0.0yrs

Board Members

  • Nancy Southern (62yo)

    Chair & CEO

    • Tenure: 19.6yrs
    • Compensation: CA$4.84m
  • Roger Urwin (73yo)

    Independent Director

    • Tenure: 5.3yrs
    • Compensation: CA$412.46k
  • Tony Fountain (58yo)

    Independent Director

    • Tenure: 4.3yrs
    • Compensation: CA$230.60k
  • Charles Wilson (79yo)

    Lead Director

    • Tenure: 16.3yrs
    • Compensation: CA$630.41k
  • Rob Routs (73yo)

    Independent Director

    • Tenure: 7.3yrs
    • Compensation: CA$291.61k
  • Robert Booth (66yo)

    Director

    • Tenure: 11.6yrs
    • Compensation: CA$246.90k
  • Michael R. Rayfield (76yo)

    Independent Director

    • Tenure: 10.3yrs
    • Compensation: CA$233.10k
  • Denis Ellard (72yo)

    Independent Director

    • Tenure: 5.3yrs
    • Compensation: CA$225.60k
  • Susan Werth (62yo)

    Director

    • Tenure: 5.1yrs
    • Compensation: CA$254.30k
  • Linda Southern-Heathcott (56yo)

    Vice Chairman of the Board

    • Tenure: 2.8yrs
    • Compensation: CA$436.80k

Company Information

ATCO Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ATCO Ltd.
  • Ticker: ACO.X
  • Exchange: TSX
  • Founded: 1947
  • Industry: Multi-Utilities
  • Sector: Utilities
  • Market Cap: CA$5.372b
  • Shares outstanding: 114.34m
  • Website: https://www.atco.com

Number of Employees


Location

  • ATCO Ltd.
  • 3rd floor
  • West Building
  • Calgary
  • Alberta
  • T3E 8B4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ACO.XTSX (The Toronto Stock Exchange)YesClass I Non-Voting SharesCACADJan 1981
8A6DB (Deutsche Boerse AG)YesClass I Non-Voting SharesDEEURJan 1981
ACLL.FOTCPK (Pink Sheets LLC)YesClass I Non-Voting SharesUSUSDJan 1981
ACO.YTSX (The Toronto Stock Exchange)Class II Voting SharesCACADJan 1981

Biography

ATCO Ltd., together with its subsidiaries, engages in the electricity, pipeline and liquid, and retail energy businesses in Canada, Australia, and internationally. The company operates through Canadian Uti ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/22 23:32
End of Day Share Price2019/08/22 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.