DB:AQ3

Stock Analysis Report

Executive Summary

AltaGas Ltd. operates as a diversified energy infrastructure company in North America.


Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: AQ3 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.1%

AQ3

0.7%

DE Gas Utilities

-0.9%

DE Market


1 Year Return

48.9%

AQ3

7.7%

DE Gas Utilities

12.8%

DE Market

Return vs Industry: AQ3 exceeded the German Gas Utilities industry which returned 7.7% over the past year.

Return vs Market: AQ3 exceeded the German Market which returned 12.8% over the past year.


Shareholder returns

AQ3IndustryMarket
7 Day1.1%0.7%-0.9%
30 Day11.9%3.3%-0.4%
90 Day14.6%6.7%2.3%
1 Year56.0%48.9%12.7%7.7%16.3%12.8%
3 Year-16.2%-32.0%52.3%31.8%15.8%5.7%
5 Year-32.2%-51.2%54.5%15.4%19.7%3.3%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is AltaGas 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: AQ3 (€15.35) is trading below our estimate of fair value (€44.96)

Significantly Below Fair Value: AQ3 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AQ3 is good value based on its PE Ratio (5.9x) compared to the Gas Utilities industry average (18.9x).

PE vs Market: AQ3 is good value based on its PE Ratio (5.9x) compared to the German market (21x).


Price to Earnings Growth Ratio

PEG Ratio: AQ3's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: AQ3 is good value based on its PB Ratio (1x) compared to the XE Gas Utilities industry average (1.3x).


Next Steps

Future Growth

How is AltaGas forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

-37.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AQ3's earnings are forecast to decline over the next 3 years (-37.9% per year).

Earnings vs Market: AQ3's earnings are forecast to decline over the next 3 years (-37.9% per year).

High Growth Earnings: AQ3's earnings are forecast to decline over the next 3 years.

Revenue vs Market: AQ3's revenue is expected to decline over the next 3 years (-0% per year).

High Growth Revenue: AQ3's revenue is forecast to decline over the next 3 years (-0% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AQ3's Return on Equity is forecast to be low in 3 years time (5.9%).


Next Steps

Past Performance

How has AltaGas performed over the past 5 years?

10.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AQ3 has a large one-off gain of CA$709.4M impacting its September 30 2019 financial results.

Growing Profit Margin: AQ3 became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: AQ3's earnings have grown by 10.3% per year over the past 5 years.

Accelerating Growth: AQ3 has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: AQ3 has become profitable in the last year, making it difficult to compare its past year earnings growth to the Gas Utilities industry (10.6%).


Return on Equity

High ROE: AQ3's Return on Equity (14.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is AltaGas's financial position?


Financial Position Analysis

Short Term Liabilities: AQ3's short term assets (CA$1.8B) do not cover its short term liabilities (CA$3.6B).

Long Term Liabilities: AQ3's short term assets (CA$1.8B) do not cover its long term liabilities (CA$9.4B).


Debt to Equity History and Analysis

Debt Level: AQ3's debt to equity ratio (100.6%) is considered high.

Reducing Debt: AQ3's debt to equity ratio has increased from 92.5% to 100.6% over the past 5 years.

Debt Coverage: AQ3's debt is not well covered by operating cash flow (7%).

Interest Coverage: AQ3's interest payments on its debt are not well covered by EBIT (1.7x coverage).


Balance Sheet

Inventory Level: AQ3 has a high level of physical assets or inventory.

Debt Coverage by Assets: AQ3's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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

4.28%

Current Dividend Yield


Dividend Yield vs Market

company4.3%marketbottom25%1.3%markettop25%3.6%industryaverage4.9%forecastin3Years4.3%

Current dividend yield vs market & industry

Notable Dividend: AQ3's dividend (4.28%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: AQ3's dividend (4.28%) is in the top 25% of dividend payers in the German market (3.63%)


Stability and Growth of Payments

Stable Dividend: AQ3's dividend payments have been volatile in the past 10 years.

Growing Dividend: AQ3's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.7%), AQ3's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AQ3's dividends in 3 years are forecast to be covered by earnings (64.3% payout ratio).


Next Steps

Management

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

3.2yrs

Average management tenure


CEO

Randy Crawford (56yo)

1.2yrs

Tenure

CA$4,925,555

Compensation

Mr. Randall L. Crawford, also known as Randy, serves as Director at WGL Holdings, Inc. Mr. Crawford has been the Chief Executive Officer and a Non-Independent Director at AltaGas Ltd. since December 10, 20 ...


CEO Compensation Analysis

Compensation vs Market: Randy's total compensation ($USD3.73M) is above average for companies of similar size in the German market ($USD2.28M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Randall Crawford
President1.2yrsCA$4.93m0.0066% CA$289.3k
David Cornhill
Founder & Director25.8yrsCA$2.40m0.58% CA$25.3m
John O'Brien
Executive VP of Government & Regulatory Affairs - ASUS and EVP of Strategy & Public Affairs - WG0yrsCA$2.14mno data
D. Harbilas
Executive VP & CFO0.7yrsno data0.011% CA$484.7k
Corine Renne Bushfield
Executive VP & Chief Administrative Officer3.2yrsCA$1.76m0.0015% CA$64.7k
Jess Nieukerk
Senior Director of Investor Relations0yrsno datano data
Bradley Grant
Executive VP of Strategy & Corporate Development and Chief Legal Officer4.8yrsCA$1.20m0.0014% CA$59.0k
Kent Stout
Senior Vice President of Organizational Development3.2yrsCA$991.41kno data
Randy Toone
Executive VP & President of Midstream3.2yrsCA$634.39k0.0014% CA$62.9k
Joy Thakur
Senior Vice President of Commercial & Business Operations0yrsCA$722.72kno data

3.2yrs

Average Tenure

56yo

Average Age

Experienced Management: AQ3's management team is considered experienced (3.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Randall Crawford
President1.2yrsCA$4.93m0.0066% CA$289.3k
David Cornhill
Founder & Director25.8yrsCA$2.40m0.58% CA$25.3m
Robert Hodgins
Independent Director14.9yrsCA$249.90k0.0061% CA$265.3k
Allan Edgeworth
Independent Director14.9yrsCA$176.50k0.014% CA$624.1k
Terry McCallister
Non-Independent Director1.6yrsCA$123.03k0.016% CA$688.3k
Pentti Karkkainen
Independent Chairman of the Board0.8yrsCA$92.50k0.0036% CA$156.5k
Phillip Knoll
Independent Director4.3yrsCA$1.95m0.0064% CA$279.7k
Daryl Gilbert
Independent Director19.8yrsCA$176.50k0.015% CA$639.8k
Cynthia Johnston
Independent Director1.6yrsCA$91.16k0.0011% CA$46.8k
Victoria Calvert
Independent Director4.3yrsCA$170.57k0.0027% CA$119.3k

4.3yrs

Average Tenure

64yo

Average Age

Experienced Board: AQ3's board of directors are considered experienced (4.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: AQ3 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 39%.


Top Shareholders

Company Information

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


Key Information

  • Name: AltaGas Ltd.
  • Ticker: AQ3
  • Exchange: DB
  • Founded: 1994
  • Industry: Gas Utilities
  • Sector: Utilities
  • Market Cap: CA$6.273b
  • Listing Market Cap: CA$4.370b
  • Shares outstanding: 279.42m
  • Website: https://www.altagas.ca

Number of Employees


Location

  • AltaGas Ltd.
  • 355 - 4th Avenue SW
  • Suite 1700
  • Calgary
  • Alberta
  • T2P 0J1
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ALATSX (The Toronto Stock Exchange)YesCommon SharesCACADJul 1999
AQ3DB (Deutsche Boerse AG)YesCommon SharesDEEURJul 1999
ATGF.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJul 1999
ALA.PRUTSX (The Toronto Stock Exchange)4.4 PFD SHS CCAUSDJun 2012
ALTG.FOTCPK (Pink Sheets LLC)4.4 PFD SHS CUSUSDJun 2012
ALA.PRETSX (The Toronto Stock Exchange)RED PFDSHS SER ECACADDec 2013
ATGA.FOTCPK (Pink Sheets LLC)PFD SHS SER GUSCADJul 2014
ALA.PRITSX (The Toronto Stock Exchange)PFD SER ICACADNov 2015
TGAP.FOTCPK (Pink Sheets LLC)PFD SER IUSUSDNov 2015
ALA.PRKTSX (The Toronto Stock Exchange)PFD SER K 5%CACADFeb 2017
ALA.PRHTSX (The Toronto Stock Exchange)PFD CUM SHS HCACADOct 2019

Biography

AltaGas Ltd. operates as a diversified energy infrastructure company in North America. The company operates through three segments: Utilities, Midstream, and Power. The Utilities segment owns and operates regulated natural gas distribution utilities in Michigan, Alaska, the District of Columbia, Maryland, and Virginia; and 2 regulated natural gas storage utilities in the United States serving approximately 1.6 million customers. This segment also provides interstate natural gas transportation and storage services. It serves homes and businesses. The Midstream segment engages in the natural gas gathering and processing; natural gas liquids (NGL) extraction and fractionation, transmission, and storage; natural gas and NGL marketing; and gas retail marketing activities. This segment owns approximately 1.5 billion cubic feet per day (Bcf/d) of natural gas extraction processing capacity and approximately 0.7 Bcf/d of raw field gas processing capacity; and holds interest in 4 regulated pipelines in the Marcellus/Utica gas formation in the northeastern United States. It serves residential, commercial, and industrial customers primarily in the Western Canada Sedimentary Basin. The Power segment is involved in the generation and sale of electricity; and energy storage and retail power marketing activities. It has 1,105 megawatt of operational gross capacity from natural gas-fired, biomass, solar, and distributed energy. This segment also provides ancillary services. It serves residential, commercial, and industrial users. AltaGas Ltd. was founded in 1994 and is headquartered in Calgary, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 21:48
End of Day Share Price2020/02/21 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.