TSX:VNR

Stock Analysis Report

Executive Summary

Valener Inc., through its subsidiaries, engages in the natural gas business in Canada and the United States.


Snowflake Analysis

Good value with proven track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: VNR has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

VNR

2.7%

CA Gas Utilities

0.3%

CA Market


1 Year Return

36.7%

VNR

34.4%

CA Gas Utilities

5.5%

CA Market

Return vs Industry: VNR underperformed the Canadian Gas Utilities industry which returned 39.7% over the past year.

Return vs Market: VNR exceeded the Canadian Market which returned 10.4% over the past year.


Shareholder returns

VNRIndustryMarket
7 Day0%2.7%0.3%
30 Day0.5%4.8%0.5%
90 Day0.7%5.7%3.5%
1 Year44.0%36.7%41.6%34.4%8.8%5.5%
3 Year44.8%23.4%20.4%9.4%14.8%4.5%
5 Year118.6%66.1%49.5%25.4%34.1%14.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

27.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VNR (CA$25.99) is trading below our estimate of fair value (CA$35.63)

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


Price To Earnings Ratio

PE vs Industry: VNR is good value based on its PE Ratio (17.7x) compared to the Gas Utilities industry average (17.7x).

PE vs Market: VNR is poor value based on its PE Ratio (17.7x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: VNR is good value based on its PB Ratio (1.5x) compared to the CA Gas Utilities industry average (1.5x).


Next Steps

Future Growth

How is Valener forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

1.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VNR's forecast earnings growth (1% per year) is below the savings rate (1.9%).

Earnings vs Market: VNR's earnings (1% per year) are forecast to grow slower than the Canadian market (10.3% per year).

High Growth Earnings: VNR's earnings are forecast to grow, but not significantly.

Revenue vs Market: Insufficient data to determine if VNR's revenue is forecast to grow faster than the Canadian market.

High Growth Revenue: Insufficient data to determine if VNR's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has Valener performed over the past 5 years?

4.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VNR has high quality earnings.

Growing Profit Margin: VNR's current net profit margins (66.7%) are lower than last year (67.2%).


Past Earnings Growth Analysis

Earnings Trend: VNR's earnings have grown by 4.9% per year over the past 5 years.

Accelerating Growth: VNR's earnings growth over the past year (29.6%) exceeds its 5-year average (4.9% per year).

Earnings vs Industry: VNR earnings growth over the past year (29.6%) exceeded the Gas Utilities industry -8.6%.


Return on Equity

High ROE: VNR's Return on Equity (7.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Valener's financial position?


Financial Position Analysis

Short Term Liabilities: VNR's short term assets (CA$16.3M) do not cover its short term liabilities (CA$17.4M).

Long Term Liabilities: VNR's short term assets (CA$16.3M) do not cover its long term liabilities (CA$140.9M).


Debt to Equity History and Analysis

Debt Level: VNR's debt to equity ratio (9.8%) is considered satisfactory.

Reducing Debt: VNR's debt to equity ratio has increased from 9.6% to 9.8% over the past 5 years.

Debt Coverage: VNR's debt is well covered by operating cash flow (80.4%).

Interest Coverage: VNR's interest payments on its debt are well covered by EBIT (31.5x coverage).


Balance Sheet

Inventory Level: VNR has a low level of unsold assets or inventory.

Debt Coverage by Assets: VNR's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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

4.62%

Current Dividend Yield


Dividend Yield vs Market

company4.6%marketbottom25%1.9%markettop25%5.3%industryaverage4.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: VNR's dividend (4.62%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: VNR's dividend (4.62%) is low compared to the top 25% of dividend payers in the Canadian market (5.48%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, VNR has been paying a dividend for less than 10 years.

Growing Dividend: VNR's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (81.2%), VNR's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

5.8yrs

Average board tenure


CEO

Sophie Brochu (55yo)

12.7yrs

Tenure

CA$2,652,501

Compensation

Ms. Sophie Brochu, C.M., has been the Chief Executive Officer and President of Énergir Inc. at Valener Inc. She has been the Chief Executive Officer and President of Gaz Métro Inc., the General Partner of  ...


CEO Compensation Analysis

Compensation vs Market: Sophie's total compensation ($USD1.99M) is about average for companies of similar size in the Canadian market ($USD1.63M).

Compensation vs Earnings: Sophie's compensation has increased by more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Pierre Monahan
Independent Chairman of the Board9.3yrsCA$60.50k0.027% CA$278.4k
François Gervais
Independent Director9.1yrsCA$50.50k0.023% CA$233.9k
Serge Régnier
Independent Director2.6yrsCA$70.00k0.037% CA$374.2k
Mary-Ann Bell
Independent Director5.8yrsCA$35.50k0.027% CA$272.2k
Gwen Klees
Independent Director3.2yrsCA$68.00k0.012% CA$123.3k

5.8yrs

Average Tenure

64yo

Average Age

Experienced Board: VNR's board of directors are considered experienced (5.8 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.


Ownership Breakdown

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


Top Shareholders

Company Information

Valener Inc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Valener Inc
  • Ticker: VNR
  • Exchange: TSX
  • Founded: 2010
  • Industry: Gas Utilities
  • Sector: Utilities
  • Market Cap: CA$1.023b
  • Shares outstanding: 39.35m
  • Website: https://www.valener.com

Location

  • Valener Inc
  • 1717, rue du Havre Street
  • Montreal
  • Quebec
  • H2K 2X3
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VNRTSX (The Toronto Stock Exchange)YesCommon SharesCACADOct 2010

Biography

Valener Inc., through its subsidiaries, engages in the natural gas business in Canada and the United States. Its Energy Distribution segment engages in the natural gas distribution activities in Quebec and Vermont, as well as electricity distribution activities in Vermont to 205,000 customers through a pipeline network of approximately 11,000 kilometers in Quebec, as well as 50,000 customers in residential, commercial, and industrial markets through a network of 1,500 kilometers. This segment is also involved in the distribution, transportation, production, purchase, and sale of electricity to 265,000 customers through 16,300 kilometers of overhead distribution lines; 2,000 kilometers of underground distribution lines; and 2,700 kilometers of overhead transmission lines. It operates 2 wind farms with an installed capacity of 69 megawatts, as well as 21 solar farms with an installed capacity of 25 megawatts in Vermont; and 44 hydroelectric generating stations in New England. The company’s Natural Gas Transportation segment operates 2 pipelines totaling 98 kilometers in northwest Quebec; 575- kilometers pipeline in Quebec; and 489- kilometers pipeline from the Quebec border to the suburbs of Boston. Its Electricity Production segment develops and owns solar power generation projects in the United States; and 3 wind farms with a total installed capacity of 340 megawatts on the private lands of Seigneurie de Beaupré. The company’s Energy Services, Storage and Other segment engages in the sale of liquefied natural gas as a fuel or energy product; electric power generation and transmission from a thermal power plant, as well as the sale, leasing, and maintenance of natural gas appliances; and underground natural gas storage activities in Quebec. Valener Inc. was incorporated in 2010 and is based in Montreal, Canada. As of September 27, 2019, Valener Inc operates as a subsidiary of Noverco Inc. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/04 00:27
End of Day Share Price2019/09/30 00:00
Earnings2019/06/30
Annual Earnings2018/09/30


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.