DB:2J3

Stock Analysis Report

Executive Summary

AltaGas Canada Inc., a natural gas distribution utility company, provides rate-regulated utility services in northern British Columbia.


Snowflake Analysis

Solid track record second-rate dividend payer.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 2J3 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.8%

2J3

0.8%

DE Gas Utilities

0.1%

DE Market


1 Year Return

107.2%

2J3

8.6%

DE Gas Utilities

14.1%

DE Market

Return vs Industry: 2J3 exceeded the German Gas Utilities industry which returned 8.6% over the past year.

Return vs Market: 2J3 exceeded the German Market which returned 14.1% over the past year.


Shareholder returns

2J3IndustryMarket
7 Day1.8%0.8%0.1%
30 Day1.8%4.3%0.2%
90 Day3.4%6.2%3.3%
1 Year116.6%107.2%13.7%8.6%17.6%14.1%
3 Yearn/a51.7%31.3%14.8%4.8%
5 Yearn/a56.3%16.8%22.2%5.4%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

2.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2J3 (€22.8) is trading below our estimate of fair value (€23.43)

Significantly Below Fair Value: 2J3 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 2J3 is poor value based on its PE Ratio (21.4x) compared to the Gas Utilities industry average (17x).

PE vs Market: 2J3 is poor value based on its PE Ratio (21.4x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: 2J3 is poor value based on its PEG Ratio (20.6x)


Price to Book Ratio

PB vs Industry: 2J3 is overvalued based on its PB Ratio (1.6x) compared to the XE Gas Utilities industry average (1.3x).


Next Steps

Future Growth

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

1.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2J3's forecast earnings growth (1% per year) is above the savings rate (-0.4%).

Earnings vs Market: 2J3's earnings (1% per year) are forecast to grow slower than the German market (13.3% per year).

High Growth Earnings: 2J3's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2J3's revenue (2.9% per year) is forecast to grow slower than the German market (5% per year).

High Growth Revenue: 2J3's revenue (2.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 2J3's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has AltaGas Canada performed over the past 5 years?

9.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2J3 has high quality earnings.

Growing Profit Margin: 2J3's current net profit margins (14.6%) are higher than last year (13.7%).


Past Earnings Growth Analysis

Earnings Trend: 2J3's earnings have grown by 9% per year over the past 5 years.

Accelerating Growth: 2J3's earnings growth over the past year (13%) exceeds its 5-year average (9% per year).

Earnings vs Industry: 2J3 earnings growth over the past year (13%) exceeded the Gas Utilities industry 10.6%.


Return on Equity

High ROE: 2J3's Return on Equity (7.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is AltaGas Canada's financial position?


Financial Position Analysis

Short Term Liabilities: 2J3's short term assets (CA$35.9M) do not cover its short term liabilities (CA$64.8M).

Long Term Liabilities: 2J3's short term assets (CA$35.9M) do not cover its long term liabilities (CA$820.9M).


Debt to Equity History and Analysis

Debt Level: 2J3's debt to equity ratio (106.5%) is considered high.

Reducing Debt: Insufficient data to determine if 2J3's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 2J3's debt is not well covered by operating cash flow (13.1%).

Interest Coverage: 2J3's interest payments on its debt are not well covered by EBIT (2.5x coverage).


Balance Sheet

Inventory Level: 2J3 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2J3's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

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

3.11%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 2J3's dividend (3.11%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: 2J3's dividend (3.11%) is low compared to the top 25% of dividend payers in the German market (3.57%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether 2J3's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if 2J3's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.2%), 2J3's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2J3's dividends in 3 years are forecast to be covered by earnings (71% payout ratio).


Next Steps

Management

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

1.4yrs

Average board tenure


CEO

Jared Green (43yo)

CA$1,208,759

Compensation

Mr. Jared Blake Green, CA, serves as the President and Chief Executive Officer of AltaGas Canada Inc. and has been its Director since October 2017. Mr. Green has been Corporate Secretary and Vice President ...


CEO Compensation Analysis

Compensation vs Market: Jared's total compensation ($USD911.60K) is about average for companies of similar size in the German market ($USD1.17M).

Compensation vs Earnings: Insufficient data to compare Jared's compensation with company performance.


Board Members

NamePositionTenureCompensationOwnership
Jared Green
President0yrsCA$1.21m0.19% CA$1.3m
David Cornhill
Chairman of the Board0yrsno data0.35% CA$2.5m
William Demcoe
Independent Director1.4yrsCA$28.30kno data
Gregory Aarssen
Lead Director1.4yrsCA$28.32k0.020% CA$143.0k
Judith Athaide
Independent Director1.4yrsCA$26.72k0.046% CA$323.6k
Corine Renne Bushfield
Director1.4yrsno datano data
Amit Chakma
Independent Director1.4yrsCA$26.71kno data

1.4yrs

Average Tenure

60yo

Average Age

Experienced Board: 2J3'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

AltaGas Canada Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: AltaGas Canada Inc.
  • Ticker: 2J3
  • Exchange: DB
  • Founded: 2011
  • Industry: Gas Utilities
  • Sector: Utilities
  • Market Cap: CA$1.004b
  • Listing Market Cap: CA$703.492m
  • Shares outstanding: 30.00m
  • Website: https://www.altagascanada.ca

Number of Employees


Location

  • AltaGas Canada Inc.
  • 444 5th Avenue SW
  • Suite 2100
  • Calgary
  • Alberta
  • T2P 2T8
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ACITSX (The Toronto Stock Exchange)YesCommon SharesCACADOct 2018
2J3DB (Deutsche Boerse AG)YesCommon SharesDEEUROct 2018
AGAA.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDOct 2018

Biography

AltaGas Canada Inc., a natural gas distribution utility company, provides rate-regulated utility services in northern British Columbia. It operates in Renewable Energy and Utilities segments. The company also holds interest in the Bear Mountain Wind Park, a 102 MW generating wind facility consisting of 34 turbines, a substation, and transmission and collector lines; and the northwest hydro facilities located in Tahltan first nation territory of Vancouver, British Columbia. It also operates gas distribution systems. AltaGas Canada Inc. serves 130,000 commercial and residential customers. The company was formerly known as AltaGas Utility Holdings (Pacific) Inc. and changed its name to AltaGas Canada Inc. in September 2018. The company was incorporated in 2011 and is headquartered in Calgary, Canada. AltaGas Canada Inc. is a subsidiary of AltaGas Ltd. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 23:34
End of Day Share Price2020/02/19 00:00
Earnings2019/09/30
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.