HLSE:FORTUM

Stock Analysis Report

Executive Summary

Fortum Oyj, together with its subsidiaries, engages in the generation and sale of electricity and heat in the Nordic countries, Russia, Poland, India, other parts of the Baltic Rim area, and internationally.

Snowflake

Fundamentals

6 star dividend payer with adequate balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

2.5%

FORTUM

-0.3%

FI Electric Utilities

3.0%

FI Market


1 Year Return

8.2%

FORTUM

21.4%

FI Electric Utilities

4.6%

FI Market

Return vs Industry: FORTUM underperformed the Finnish Electric Utilities industry which returned 21.4% over the past year.

Return vs Market: FORTUM exceeded the Finnish Market which returned 4.6% over the past year.


Share holder returns

FORTUMIndustryMarket
7 Day2.5%-0.3%3.0%
30 Day2.7%-0.7%-0.4%
90 Day4.7%2.4%1.3%
1 Year14.5%8.2%26.2%21.4%9.5%4.6%
3 Year74.8%43.8%58.7%38.3%29.7%14.4%
5 Year71.6%20.4%52.4%13.7%66.1%34.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Fortum Oyj undervalued based on future cash flows and its price relative to the stock market?

25%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: FORTUM (€21.36) is trading below our estimate of fair value (€28.54)

Significantly Undervalued: FORTUM is trading below fair value, but not by a significant amount.


Price Based on Earnings

PE vs Industry: FORTUM is poor value based on its PE Ratio (15.9x) compared to the Electric Utilities industry average (11.8x).

PE vs Market: FORTUM is good value based on its PE Ratio (15.9x) compared to the Finnish market (20.2x).


Price Based on Expected Growth

Low PEG Ratio: FORTUM is poor value based on its PEG Ratio (1.8x)


Price Based on Value of Assets

PB vs Industry: FORTUM is overvalued based on its PB Ratio (1.5x) compared to the XE Electric Utilities industry average (0.9x).


Next Steps

Future Growth

How is Fortum Oyj expected to perform in the next 1 to 3 years based on estimates from 16 analysts?

8.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: FORTUM's forecast earnings growth (8.7% per year) is above the savings rate (0.5%).

Earnings vs Market: FORTUM's earnings (8.7% per year) are forecast to grow slower than the Finnish market (13.7% per year).

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

Revenue vs Market: FORTUM's revenue is expected to decline over the next 3 years (-0.6% per year).

High Growth Revenue: FORTUM's revenue is forecast to decline over the next 3 years (-0.6%).


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: FORTUM's Return on Equity is forecast to be low in 3 years time (10.9%).


Next Steps

Past Performance

How has Fortum Oyj performed over the past 5 years?

7.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: FORTUM's earnings have grown by 7.2% per year over the past 5 years.

Accelerating Growth: FORTUM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FORTUM had negative earnings growth (-0.8%) over the past year, making it difficult to compare to the Electric Utilities industry average (2.3%).


Return on Equity

High ROE: FORTUM's Return on Equity (9.6%) is considered low.


Return on Assets

ROA vs Industry: FORTUM has a higher Return on Assets than the Electric Utilities industry average last year.


Return on Capital Employed

ROCE Improving: FORTUM has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Fortum Oyj's financial position?


Financial Position Analysis

Short Term Liabilities: FORTUM's short term assets (€3.2B) exceeds its short term liabilities (€1.8B)

Long Term Liabilities: FORTUM's short term assets (3.2B) do not cover its long term liabilities (8.4B)


Debt to Equity History and Analysis

Debt Level: FORTUM's debt to equity ratio (54.1%) is considered high

Reducing Debt: FORTUM's debt to equity ratio has reduced from 64.1% to 54.1% over the past 5 years.

Debt Coverage: FORTUM's debt is well covered by operating cash flow (24.3%).

Interest Coverage: FORTUM's interest payments on its debt are well covered by EBIT (8.7x coverage).


Balance Sheet

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

Debt Coverage by Assets: FORTUM's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

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

5.25%

Expected Dividend Yield


Dividend Yield vs Market

company5.1%marketbottom25%2.3%markettop25%5.1%industryaverage4.7%forecastin3Years5.3%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: FORTUM's dividend (5.15%) is higher than the bottom 25% of dividend payers in the Finnish market (2.27%).

High Dividend: FORTUM's dividend (5.15%) is in the top 25% of dividend payers in the Finnish market (5.1%)

Stable Dividend: FORTUM's dividends per share have been stable in the past 10 years.

Growing Dividend: FORTUM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (82%), FORTUM's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FORTUM's dividends in 3 years are forecast to be covered by earnings (66.2% payout ratio).


Next Steps

Management

What is the CEO of Fortum Oyj's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Pekka Lundmark (56yo)

4.1yrs

Tenure

€2,111,000

Compensation

Mr. Pekka Ilmari Lundmark, M.Sc.(Eng.), has been President and Chief Executive Officer of Fortum Oyj since September 7, 2015 and serves as its Managing Director. Mr. Lundmark served as President and Chief  ...


CEO Compensation Analysis

Compensation vs. Market: Pekka's total compensation ($USD2.33M) is about average for companies of similar size in the Finnish market ($USD497.26K).

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


Management Age and Tenure

3.8yrs

Average Tenure

53yo

Average Age

Experienced Management: FORTUM's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

2.2yrs

Average Tenure

61yo

Average Age

Experienced Board: FORTUM's board of directors are not considered experienced ( 2.2 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown


Management Team

  • Pekka Lundmark (56yo)

    President

    • Tenure: 4.1yrs
    • Compensation: €2.11m
  • Sirpa-Helena Sormunen (60yo)

    Secretary to the Board & General Counsel

    • Tenure: 5.1yrs
  • Markus Heikki Rauramo (51yo)

    Chief Financial Officer

    • Tenure: 2.6yrs
  • Per Langer (50yo)

    Executive Vice President of City Solutions

    • Tenure: 2.6yrs
  • Ingela Ulfves (53yo)

    Vice President of Investor Relations & Financial Communications

    • Tenure: 0yrs
  • Erkki Kari-Koskinen

    Head of Markets

    • Tenure: 0yrs
  • Anders Egelrud (54yo)

    Managing Director of Fortum Värme

    • Tenure: 0yrs
  • Heli Kurki

    Head of Publicity & Communications

    • Tenure: 0yrs
  • Ensio Väisänen

    Head of Corporate Financial Services Unit

    • Tenure: 12.3yrs
  • Risto Penttinen (51yo)

    Senior VP of Strategy

    • Tenure: 3.5yrs

Board Members

  • Kim Ignatius (63yo)

    Independent Non-Executive Director

    • Tenure: 7.5yrs
  • Matti Lievonen (61yo)

    Independent Chairman

    • Tenure: 1.6yrs
  • Silvennoinen McAlister (59yo)

    Independent Non-Executive Director

    • Tenure: 2.8yrs
  • Klaus-Dieter Maubach (57yo)

    Deputy Chairman

    • Tenure: 1.6yrs
  • Veli-Matti Reinikkala (62yo)

    Independent Non-Executive Director

    • Tenure: 3.5yrs
  • Essimari Kairisto (53yo)

    Director

    • Tenure: 1.6yrs
  • Eva Hamilton (65yo)

    Independent Non-Executive Director

    • Tenure: 4.6yrs
  • Philipp Rösler

    Director

    • Tenure: 0.6yrs

Company Information

Fortum Oyj's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fortum Oyj
  • Ticker: FORTUM
  • Exchange: HLSE
  • Founded: 1998
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: €18.974b
  • Shares outstanding: 888.29m
  • Website: https://www.fortum.com

Number of Employees


Location

  • Fortum Oyj
  • CD Building
  • Keilalahdentie 2-4
  • Espoo
  • Uusimaa
  • 2150
  • Finland

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FOJC.FOTCPK (Pink Sheets LLC)YesRegistered SharesUSUSDDec 1998
FORTUMHLSE (OMX Nordic Exchange Helsinki)YesRegistered SharesFIEURDec 1998
0HAHLSE (London Stock Exchange)YesRegistered SharesGBEURDec 1998
FOTDB (Deutsche Boerse AG)YesRegistered SharesDEEURDec 1998
FOTXTRA (XETRA Trading Platform)YesRegistered SharesDEEURDec 1998
FORTMHBATS-CHIXE (BATS 'Chi-X Europe')YesRegistered SharesGBEURDec 1998
FOJC.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

Biography

Fortum Oyj, together with its subsidiaries, engages in the generation and sale of electricity and heat in the Nordic countries, Russia, Poland, India, other parts of the Baltic Rim area, and internationall ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/13 20:37
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
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.

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