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Market Cap

CA$3.3b

Last Updated

2021/04/10 22:34 UTC

Data Sources

Company Financials +

Executive Summary

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

Rewards

Trading at 76% below our estimate of its fair value

Earnings are forecast to grow 103.46% per year

Risk Analysis

No risks detected for TA from our risk checks.


Snowflake Analysis

Mediocre balance sheet with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: TA is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: TA's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

2.1%

TA

0.8%

CA Renewable Energy

0.9%

CA Market


1 Year Return

52.5%

TA

49.7%

CA Renewable Energy

39.2%

CA Market

Return vs Industry: TA exceeded the Canadian Renewable Energy industry which returned 49.7% over the past year.

Return vs Market: TA exceeded the Canadian Market which returned 39.2% over the past year.


Shareholder returns

TAIndustryMarket
7 Day2.1%0.8%0.9%
30 Day10.8%5.6%3.0%
90 Day16.5%-16.1%7.5%
1 Year55.4%52.5%55.1%49.7%43.9%39.2%
3 Year92.3%81.4%138.3%107.5%32.5%19.8%
5 Year125.9%103.5%183.0%122.8%59.3%35.1%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

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$12.35) is trading below our estimate of fair value (CA$51.45)

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 CA 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's PB Ratio (2.4x) is in line with the CA Renewable Energy industry average.


Future Growth

How is TransAlta forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

103.5%

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 (5.5% per year) is forecast to grow slower than the Canadian market (7.2% per year).

High Growth Revenue: TA's revenue (5.5% 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 (15.5%).


Past Performance

How has TransAlta performed over the past 5 years?

-31.8%

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 31.8% 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 (-19.8%).


Return on Equity

High ROE: TA has a negative Return on Equity (-7.36%), 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$935.0M).

Long Term Liabilities: TA's short term assets (CA$1.9B) do not cover its long term liabilities (CA$5.4B).


Debt to Equity History and Analysis

Debt Level: TA's debt to equity ratio (115.2%) is considered high.

Reducing Debt: TA's debt to equity ratio has increased from 100.2% to 115.2% 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 18.3% per year.


Dividend

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

1.46%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TA's dividend (1.46%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.47%).

High Dividend: TA's dividend (1.46%) is low compared to the top 25% of dividend payers in the Canadian market (4.73%).


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?

2.3yrs

Average management tenure


CEO

John Kousinioris (55 yo)

no data

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 ($USD2.36M) is about average for companies of similar size in the Canadian market ($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 (2.3 years average tenure).


Board Members

Experienced Board: TA's board of directors are considered experienced (3.4 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: TA 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 company bio, 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$3.333b
  • Shares outstanding: 269.88m
  • Website: https://www.transalta.com

Number of Employees


Location

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

Listings


Biography

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...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/04/10 22:34
End of Day Share Price2021/04/09 00:00
Earnings2020/12/31
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.