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TA

TransAltaTSX:TA Stock Report

Market Cap

CA$3.5b

7D

1.9%

1Y

62.5%

Updated

27 Sep, 2021

Data

Company Financials +
TA fundamental analysis
Snowflake Score
Valuation2/6
Future Growth3/6
Past Performance0/6
Financial Health3/6
Dividends0/6

TA Overview

TransAlta Corporation owns, operates, and develops a diverse fleet of electrical power generation assets in Canada, the United States, and Australia.

Rewards

Trading at 75.4% below our estimate of its fair value

Earnings are forecast to grow 26.13% per year

Risk Analysis

No risks detected for TA from our risk checks.

TransAlta Competitors

Price History & Performance

Summary of all time highs, changes and price drops for TransAlta
Historical stock prices
Current Share PriceCA$13.08
52 Week HighCA$7.85
52 Week LowCA$13.50
Beta1.37
1 Month Change4.22%
3 Month Change5.15%
1 Year Change62.48%
3 Year Change82.43%
5 Year Change126.30%
Change since IPO-6.57%

Recent News & Updates

Shareholder Returns

TACA Renewable EnergyCA Market
7D1.9%-2.5%1.8%
1Y62.5%8.1%29.7%

Return vs Industry: TA exceeded the Canadian Renewable Energy industry which returned 8.1% over the past year.

Return vs Market: TA exceeded the Canadian Market which returned 29.7% over the past year.

Price Volatility

Is TA's price volatile compared to industry and market?
TA volatility
TA Beta1.37
Industry Beta0.63
Market Beta1

Stable Share Price: TA is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: TA's weekly volatility (2%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19091,476John Kousiniorishttps://www.transalta.com

TransAlta Corporation owns, operates, and develops a diverse fleet of electrical power generation assets in Canada, the United States, and Australia. It operates through six segments: Hydro, Wind and Solar, North American Gas, Australian Gas, Alberta Thermal, and Centralia. The company owns and operates hydro, wind and solar, natural gas-fired, and coal-fired facilities.

TransAlta Fundamentals Summary

How do TransAlta's earnings and revenue compare to its market cap?
TA fundamental statistics
Market CapCA$3.54b
Earnings (TTM)-CA$345.00m
Revenue (TTM)CA$2.32b

1.5x

P/S Ratio

-10.3x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
TA income statement (TTM)
RevenueCA$2.32b
Cost of RevenueCA$1.62b
Gross ProfitCA$697.00m
ExpensesCA$1.04b
Earnings-CA$345.00m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)-1.27
Gross Margin30.06%
Net Profit Margin-14.88%
Debt/Equity Ratio115.7%

How did TA perform over the long term?

See historical performance and comparison

Dividends

1.4%

Current Dividend Yield

-14%

Payout Ratio

Valuation

Is TransAlta undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TA (CA$13.08) is trading below our estimate of fair value (CA$53.11)

Significantly Below Fair Value: TA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TA is unprofitable, so we can't compare its PE Ratio to the Canadian Renewable Energy industry average.

PE vs Market: TA is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate TA's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: TA is overvalued based on its PB Ratio (2.8x) compared to the CA Renewable Energy industry average (2.3x).


Future Growth

How is TransAlta forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

26.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TA is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.5%).

Earnings vs Market: TA is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: TA's is expected to become profitable in the next 3 years.

Revenue vs Market: TA's revenue (3.4% per year) is forecast to grow slower than the Canadian market (6.1% per year).

High Growth Revenue: TA's revenue (3.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TA's Return on Equity is forecast to be low in 3 years time (16.9%).


Past Performance

How has TransAlta performed over the past 5 years?

-36.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TA is currently unprofitable.

Growing Profit Margin: TA is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: TA is unprofitable, and losses have increased over the past 5 years at a rate of 36.6% per year.

Accelerating Growth: Unable to compare TA's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: TA is unprofitable, making it difficult to compare its past year earnings growth to the Renewable Energy industry (-25.1%).


Return on Equity

High ROE: TA has a negative Return on Equity (-7.21%), as it is currently unprofitable.


Financial Health

How is TransAlta's financial position?


Financial Position Analysis

Short Term Liabilities: TA's short term assets (CA$1.9B) exceed its short term liabilities (CA$1.1B).

Long Term Liabilities: TA's short term assets (CA$1.9B) do not cover its long term liabilities (CA$5.1B).


Debt to Equity History and Analysis

Debt Level: TA's debt to equity ratio (115.7%) is considered high.

Reducing Debt: TA's debt to equity ratio has increased from 88.8% to 115.7% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable TA has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: TA is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 12.8% per year.


Dividend

What is TransAlta current dividend yield, its reliability and sustainability?

1.38%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TA's dividend (1.38%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.66%).

High Dividend: TA's dividend (1.38%) is low compared to the top 25% of dividend payers in the Canadian market (4.54%).


Stability and Growth of Payments

Stable Dividend: TA's dividend payments have been volatile in the past 10 years.

Growing Dividend: TA's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: TA is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: TA is forecast to pay a dividend in 3 years whilst incurring a loss, therefore the dividend is not forecast to be well covered.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure


CEO

John Kousinioris (56 yo)

0.42

Tenure

CA$2,962,460

Compensation

Mr. John Harry Kousinioris has been President, Chief Executive Officer and Director at TransAlta Corporation since April 1, 2021. Mr. Kousinioris served as Chief Operating Officer at TransAlta Corporation...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD2.34M) is about average for companies of similar size in the Canadian market ($USD3.01M).

Compensation vs Earnings: John's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: TA's management team is considered experienced (2.7 years average tenure).


Board Members

Experienced Board: TA's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

TransAlta Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: TransAlta Corporation
  • Ticker: TA
  • Exchange: TSX
  • Founded: 1909
  • Industry: Independent Power Producers and Energy Traders
  • Sector: Utilities
  • Market Cap: CA$3.544b
  • Shares outstanding: 270.98m
  • Website: https://www.transalta.com

Number of Employees


Location

  • TransAlta Corporation
  • 110-12th Avenue SW
  • PO Box 1900
  • Calgary
  • Alberta
  • T2P 2M1
  • Canada

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/27 22:59
End of Day Share Price2021/09/27 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.