TSX:TA

Stock Analysis Report

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Executive Summary

TransAlta Corporation operates as non-regulated electricity generation and energy marketing company in Canada, the United States, and Western Australia. More Details


Snowflake Analysis

Good value 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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.7%

TA

0.5%

CA Renewable Energy

-1.0%

CA Market


1 Year Return

4.8%

TA

49.5%

CA Renewable Energy

-4.3%

CA Market

Return vs Industry: TA underperformed the Canadian Renewable Energy industry which returned 47.7% over the past year.

Return vs Market: TA exceeded the Canadian Market which returned -4.2% over the past year.


Shareholder returns

TAIndustryMarket
7 Day-0.7%0.5%-1.0%
30 Day8.3%17.7%1.3%
90 Day-2.5%19.0%1.9%
1 Year6.8%4.8%55.9%49.5%-0.9%-4.3%
3 Year16.9%10.0%94.9%67.7%6.4%-4.0%
5 Year51.9%32.8%185.8%121.3%33.3%12.8%

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$8.46) is trading below our estimate of fair value (CA$48.09)

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


Price To Earnings Ratio

PE vs Industry: TA is poor value based on its PE Ratio (28.1x) compared to the CA Renewable Energy industry average (19.4x).

PE vs Market: TA is poor value based on its PE Ratio (28.1x) compared to the Canadian market (16.5x).


Price to Earnings Growth Ratio

PEG Ratio: TA is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: TA is good value based on its PB Ratio (1.2x) compared to the CA Renewable Energy industry average (1.6x).


Next Steps

Future Growth

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

39.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TA's forecast earnings growth (39.7% per year) is above the savings rate (1.7%).

Earnings vs Market: TA's earnings (39.7% per year) are forecast to grow faster than the Canadian market (21.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TA's revenue is expected to decline over the next 3 years (-2.6% per year).

High Growth Revenue: TA's revenue is forecast to decline over the next 3 years (-2.6% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if TA's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has TransAlta performed over the past 5 years?

-29.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TA has a large one-off gain of CA$185.0M impacting its June 30 2020 financial results.

Growing Profit Margin: TA became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: TA has become profitable over the past 5 years, growing earnings by -29.6% per year.

Accelerating Growth: TA has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: TA has become profitable in the last year, making it difficult to compare its past year earnings growth to the Renewable Energy industry (15.8%).


Return on Equity

High ROE: TA's Return on Equity (4.7%) is considered low.


Next Steps

Financial Health

How is TransAlta's financial position?


Financial Position Analysis

Short Term Liabilities: TA's short term assets (CA$1.4B) exceed its short term liabilities (CA$1.2B).

Long Term Liabilities: TA's short term assets (CA$1.4B) do not cover its long term liabilities (CA$4.2B).


Debt to Equity History and Analysis

Debt Level: TA's debt to equity ratio (82.5%) is considered high.

Reducing Debt: TA's debt to equity ratio has reduced from 104.4% to 82.5% over the past 5 years.

Debt Coverage: TA's debt is well covered by operating cash flow (25.6%).

Interest Coverage: TA's interest payments on its debt are not well covered by EBIT (1.3x coverage).


Balance Sheet


Next Steps

Dividend

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

2.01%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: TA's dividend (2.01%) is higher than the bottom 25% of dividend payers in the Canadian market (1.69%).

High Dividend: TA's dividend (2.01%) is low compared to the top 25% of dividend payers in the Canadian market (5.78%).


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: With its reasonable payout ratio (54.8%), TA's dividend payments are covered by earnings.


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?

1.8yrs

Average management tenure


CEO

Dawn Farrell (60 yo)

8.75yrs

Tenure

CA$6,760,014

Compensation

Ms. Dawn Lorraine Farrell has been the Chief Executive Officer and President at TransAlta Corporation since January 2, 2012. Ms. Farrell served as the Chief Operating Officer of TransAlta Corporation from ...


CEO Compensation Analysis

Compensation vs Market: Dawn's total compensation ($USD5.15M) is above average for companies of similar size in the Canadian market ($USD2.07M).

Compensation vs Earnings: Dawn's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Dawn Farrell
President8.75yrsCA$6.76m0.16%
CA$ 3.8m
Todd Stack
Chief Financial Officer1.42yrsCA$1.56m0.010%
CA$ 233.3k
John Kousinioris
Chief Operating Officer1.25yrsCA$2.77m0.052%
CA$ 1.2m
Dawn de Lima
Chief Shared Services Officer2.75yrsCA$1.94m0.031%
CA$ 723.8k
Brett Gellner
Chief Development Officerno dataCA$2.63m0.061%
CA$ 1.4m
Chiara Valentini
Manager of Investor Relationsno datano datano data
Kerry Wilks
Chief Officer of Legal1.75yrsno datano data
Stacey Hatcher
Manager of Communications6.33yrsno datano data
Aron Willis
Senior Vice-President of Growth3.75yrsno data0.015%
CA$ 348.5k
Jane Fedoretz
Chief Talent & Transformation Officer1.75yrsno data0.0038%
CA$ 89.4k
Blain Van Melle
Senior Vice President of Trading & Commercial1.75yrsno data0.024%
CA$ 548.9k
Michael Novelli
Executive Vice-President of Generation0.75yrno datano data

1.8yrs

Average Tenure

55.5yo

Average Age

Experienced Management: TA's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Dawn Farrell
President8.75yrsCA$6.76m0.16%
CA$ 3.8m
Harry Goldgut
Independent Director1.5yrsCA$109.01kno data
Georgia Nelson
Independent Director6.5yrsCA$267.40k0.0018%
CA$ 42.4k
Alan Fohrer
Independent Director7.5yrsCA$278.23k0.0023%
CA$ 54.2k
John Dielwart
Independent Chair of the Board0.50yrCA$182.50k0.0046%
CA$ 107.6k
Beverlee Park
Independent Director5.5yrsCA$246.50k0.0068%
CA$ 159.0k
Richard Legault
Independent Director1.5yrsCA$109.01kno data
Yakout Mansour
Independent Director9.75yrsCA$232.23k0.0019%
CA$ 44.5k
Sandra Sharman
Independent Director0.50yrno datano data
Bryan Pinney
Independent Director2.5yrsCA$169.00k0.0074%
CA$ 173.2k
Ronalee Ambrose
Independent Director3.25yrsCA$166.00k0.0032%
CA$ 75.4k

3.3yrs

Average Tenure

64yo

Average Age

Experienced Board: TA's board of directors are considered experienced (3.3 years average tenure).


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 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$2.328b
  • Shares outstanding: 274.52m
  • Website: https://www.transalta.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TACNYSE (New York Stock Exchange)YesCommon SharesUSUSDJan 1988
TATSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1988
TZ1DB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1988
TA.PRDTSX (The Toronto Stock Exchange)CUML RED PFD-ACACADDec 2010
TNSS.FOTCPK (Pink Sheets LLC)CUML RED PFD-AUSUSDDec 2010
TA.PRJTSX (The Toronto Stock Exchange)5.3% CUM PFD GCACADAug 2014

Biography

TransAlta Corporation operates as non-regulated electricity generation and energy marketing company in Canada, the United States, and Western Australia. It operates through Canadian Coal, U.S. Coal, Canadi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/21 23:37
End of Day Share Price2020/10/21 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.