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ATCO

Atlas NYSE:ATCO Stock Report

Last Price

US$14.19

Market Cap

US$4.0b

7D

1.4%

1Y

3.7%

Updated

18 Aug, 2022

Data

Company Financials +
ATCO fundamental analysis
Snowflake Score
Valuation5/6
Future Growth3/6
Past Performance5/6
Financial Health3/6
Dividends3/6

ATCO Stock Overview

Atlas Corp. operates as an asset manager and operator of containerships.

Atlas Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Atlas
Historical stock prices
Current Share PriceUS$14.19
52 Week HighUS$16.49
52 Week LowUS$10.13
Beta1.15
1 Month Change30.66%
3 Month Change14.34%
1 Year Change3.65%
3 Year Change34.63%
5 Year Change89.20%
Change since IPO-33.38%

Recent News & Updates

Aug 17

The Atlas Corp. Special Situation

The majority shareholder group has made a non-binding offer to acquire the remaining outstanding shares of Atlas Corp. for $14.45/share. On 9/15, an activist investor published a letter that makes a compelling case that this offer severely undervalues the company. The current opportunity is best for those who like the special situation trade, yet would otherwise be interested in owning Atlas Corp. shares as a long-term investment. I received a number of reader comments/questions on the Atlas Corp. (ATCO) special situation, with most of them relating it to the MLP buyouts (Sprague Resources LP (SRLP), Blueknight Energy Partners (BKEP), Sisecam Resources LP (SIRE)) that I have commented on or written about. You can find my writeup on Sisecam Resources LP here. My two letters to Blueknight Energy LP's conflicts committee can be found here and here, and my Sprague Resources LP comment can be found here. Atlas Corp: Atlas Corp. (NYSE: ATCO) is a leading global asset management company, differentiated by its position as a best-in-class owner and operator with a focus on deploying capital to create sustainable shareholder value. Atlas brings together an experienced asset management team with deep operational and capital allocation experience. We target long-term, risk adjusted returns across high quality infrastructure assets in the maritime sector, energy sector and other infrastructure verticals. Our two main portfolio companies, Seaspan Corporation and APR Energy Limited are unique, industry-leading operating platforms in the global maritime and energy spaces, respectively. Source: Atlas Corp Situation: A majority shareholder group has made a non-binding offer to acquire the remaining outstanding shares of Atlas Corp for $14.45/share. The full statement can be found here. Yesterday, Atlas Corp shareholder Charles Frischer made a compelling case that the initial offer severely undervalues the company via a letter to the special committee evaluating the transaction which was made public yesterday. Given the above, it seems probable that at a minimum we will see some type of bump to the initial proposal. My take Playing this for a moderate bump looks like a reasonable trade - particularly when the share price is under the initial proposal level of $14.45. There are two big advantages over the recent MLP buyout proposals: Any deal will require the majority of minority shareholders to vote in its favor - this is a substantial shareholder protection. The timeline is expedited. The proposal states that that the consortium has a, "goal of entering into a binding definitive agreement within two to three weeks" of the conflict committee's engagement. This rapid timeline creates the potential for a very high IRR (Internal Rate of Return). However, I see increased risk of a "no deal" situation relative to the recent MLP take-privates. With the Atlas Corp proposal, the buyer group is 100% financially minded, highly sophisticated and acting opportunistically, whereas the MLP take-privates were/are strategic acquirers eliminating a nuisance security. I have zero doubt that this buyer group will cancel the proposal if they are unable to secure a bargain valuation.

Shareholder Returns

ATCOUS InfrastructureUS Market
7D1.4%3.9%1.1%
1Y3.7%-4.5%-9.0%

Return vs Industry: ATCO exceeded the US Infrastructure industry which returned -4.5% over the past year.

Return vs Market: ATCO exceeded the US Market which returned -9% over the past year.

Price Volatility

Is ATCO's price volatile compared to industry and market?
ATCO volatility
ATCO Average Weekly Movement8.1%
Infrastructure Industry Average Movement10.0%
Market Average Movement7.6%
10% most volatile stocks in US Market17.0%
10% least volatile stocks in US Market3.1%

Stable Share Price: ATCO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: ATCO's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20196,200Bing Chenhttps://www.atlascorporation.com

Atlas Corp. operates as an asset manager and operator of containerships. The company, through its subsidiaries, operates as an independent charter owner and manager of containerships. The company charters its containerships under long-term and fixed-rate time charters to various container liner companies.

Atlas Fundamentals Summary

How do Atlas's earnings and revenue compare to its market cap?
ATCO fundamental statistics
Market CapUS$4.02b
Earnings (TTM)US$544.60m
Revenue (TTM)US$1.53b

7.3x

P/E Ratio

2.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ATCO income statement (TTM)
RevenueUS$1.53b
Cost of RevenueUS$429.30m
Gross ProfitUS$1.10b
Other ExpensesUS$551.30m
EarningsUS$544.60m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.94
Gross Margin71.85%
Net Profit Margin35.71%
Debt/Equity Ratio92.1%

How did ATCO perform over the long term?

See historical performance and comparison

Dividends

3.5%

Current Dividend Yield

23%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is ATCO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ATCO?

Other financial metrics that can be useful for relative valuation.

ATCO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue6.7x
Enterprise Value/EBITDA10x
PEG Ratio0.5x

Price to Earnings Ratio vs Peers

How does ATCO's PE Ratio compare to its peers?

ATCO PE Ratio vs Peers
The above table shows the PE ratio for ATCO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average10.4x
SNDR Schneider National
9.5x-6.0%US$4.4b
R Ryder System
5.8x-22.5%US$4.3b
HUBG Hub Group
9.3x-13.1%US$3.0b
FWRD Forward Air
17.5x3.6%US$2.9b
ATCO Atlas
7.3x15.7%US$4.0b

Price-To-Earnings vs Peers: ATCO is good value based on its Price-To-Earnings Ratio (7.3x) compared to the peer average (10.5x).


Price to Earnings Ratio vs Industry

How does ATCO's PE Ratio compare vs other companies in the Global Infrastructure Industry?

Price-To-Earnings vs Industry: ATCO is good value based on its Price-To-Earnings Ratio (7.3x) compared to the North American Infrastructure industry average (11x)


Price to Earnings Ratio vs Fair Ratio

What is ATCO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ATCO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio7.3x
Fair PE Ratio15.8x

Price-To-Earnings vs Fair Ratio: ATCO is good value based on its Price-To-Earnings Ratio (7.3x) compared to the estimated Fair Price-To-Earnings Ratio (15.8x).


Share Price vs Fair Value

What is the Fair Price of ATCO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ATCO ($14.19) is trading below our estimate of fair value ($56.48)

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


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

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

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


15.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ATCO's forecast earnings growth (15.7% per year) is above the savings rate (1.9%).

Earnings vs Market: ATCO's earnings (15.7% per year) are forecast to grow faster than the US market (14.4% per year).

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

Revenue vs Market: ATCO's revenue (11% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: ATCO's revenue (11% 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 ATCO's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has Atlas performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


28.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ATCO has high quality earnings.

Growing Profit Margin: ATCO's current net profit margins (35.7%) are higher than last year (25.7%).


Past Earnings Growth Analysis

Earnings Trend: ATCO has become profitable over the past 5 years, growing earnings by 28.5% per year.

Accelerating Growth: ATCO's earnings growth over the past year (59.6%) exceeds its 5-year average (28.5% per year).

Earnings vs Industry: ATCO earnings growth over the past year (59.6%) exceeded the Infrastructure industry 15.3%.


Return on Equity

High ROE: ATCO's Return on Equity (12.9%) is considered low.


Discover strong past performing companies

Financial Health

How is Atlas's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: ATCO's short term assets ($706.4M) do not cover its short term liabilities ($1.3B).

Long Term Liabilities: ATCO's short term assets ($706.4M) do not cover its long term liabilities ($5.3B).


Debt to Equity History and Analysis

Debt Level: ATCO's net debt to equity ratio (82.6%) is considered high.

Reducing Debt: ATCO's debt to equity ratio has reduced from 146.9% to 92.1% over the past 5 years.

Debt Coverage: ATCO's debt is well covered by operating cash flow (22.3%).

Interest Coverage: ATCO's interest payments on its debt are well covered by EBIT (7.1x coverage).


Balance Sheet


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Dividend

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

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


3.52%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ATCO's dividend (3.52%) is higher than the bottom 25% of dividend payers in the US market (1.48%).

High Dividend: ATCO's dividend (3.52%) is low compared to the top 25% of dividend payers in the US market (3.99%).


Stability and Growth of Payments

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

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


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (23.2%), ATCO's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: ATCO is paying a dividend but the company has no free cash flows.


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Management

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

2.0yrs

Average management tenure


CEO

Bing Chen (55 yo)

2.75yrs

Tenure

Mr. Bing Chen, C.P.A, has been President, Chief Executive Officer and Director of Atlas Corp. since November 2019 and has been its Chairman since February 2020. He served as an Interim Chief Financial Offi...


Leadership Team

Experienced Management: ATCO's management team is considered experienced (2 years average tenure).


Board Members

Experienced Board: ATCO's board of directors are not considered experienced ( 2.8 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 been diluted in the past year, with total shares outstanding growing by 13.6%.


Top Shareholders

Company Information

Atlas Corp.'s employee growth, exchange listings and data sources


Key Information

  • Name: Atlas Corp.
  • Ticker: ATCO
  • Exchange: NYSE
  • Founded: 2019
  • Industry: Marine Ports and Services
  • Sector: Transportation
  • Implied Market Cap: US$4.023b
  • Shares outstanding: 280.52m
  • Website: https://www.atlascorporation.com

Number of Employees


Location

  • Atlas Corp.
  • 23 Berkeley Square
  • London
  • Greater London
  • W1J 6HE
  • United Kingdom

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/18 00:00
End of Day Share Price2022/08/18 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.