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ATCO

Atlas NYSE:ATCO Stock Report

Last Price

US$14.06

Market Cap

US$3.9b

7D

19.6%

1Y

6.5%

Updated

08 Aug, 2022

Data

Company Financials +
ATCO fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance4/6
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$14.06
52 Week HighUS$16.49
52 Week LowUS$10.13
Beta1.15
1 Month Change34.16%
3 Month Change10.02%
1 Year Change6.52%
3 Year Change39.21%
5 Year Change107.68%
Change since IPO-33.99%

Recent News & Updates

Aug 05

Atlas Management Proposes To Muscle Out Minority Shareholders

Atlas' largest shareholders, Chairman, and ONE propose to take the company private at $14.45/share, representing a $3.8B fully diluted market cap and a $9.7B Enterprise Valuation. The Company has $18B of contracted cash flows and anticipates generating $450M in cash flow to the common equity in 2022. The buyout group already owns over 70% of the outstanding shares. The buyout offer could easily be replaced with a voluntary tender without forcing out minority shareholders who wish to continue owning the business. In 2017, David Sokol, the former CEO of Berkshire Hathaway Energy (when it was called MidAmerican Energy), became the chairman of Seaspan the container ship lessor. In the past five years, Sokol and his investment partners the Washington Family and Fairfax Financial Holdings (FRFHF) have begun to build what he recently defined as a no-fee public platform for long-term infrastructure investments. The holding company is now named Atlas Corporation (ATCO) and the ship leasing business continues as Seaspan. They acquired Greater China Intermodal Investments in 2018 and APR Energy in 2020. Yesterday, Sokol, the Washington family, Fairfax, and Ocean Network Express ((ONE)) submitted a non-binding offer to take Atlas private at $14.45/share. This price is a 25% premium to Thursday's closing price, but 10% below the $16/share threshold Atlas traded at as recently as February. The board will form a committee of independent directors to evaluate the proposal. As a shareholder of Atlas Corporation, I heard the news with significant dismay. Atlas is a high-quality company that has pursued a strategy of forming long-term relationships with its shipping line partners. They have the largest fleet of any shipping lessor, their fleet is younger than most lessors, and they offer their customers lease prices well below spot market rates in order to secure long-duration leases. In the last two years, Atlas has secured long-term lease commitments on 70 new-build ships with a capacity of 847K TEU for a cost of $7.6B, arranged favorable financing at nearly 90% of the cost of the ships, and begun to accept delivery. To place this in context, Danaos Corporation (DAC) owns 71 containerships with 437K TEU of capacity. So, we can simplify our understanding of the outlook for Atlas by understanding they will add a company the size of Danaos for about $800M of equity and $6.8B of debt. Atlas' newbuilds also come with $11.4B of contracted revenue. (See slide 14 of Atlas' May 2022 Investor Presentation). Before taking into account the newbuild program, Atlas Corporation has $6.7B of contracted cash flows and $5.9B of net debt. After adding in the newbuilds, Atlas has $18.1B of contracted cash flows and an estimated $12.5B of debt. The fleet is nearly 2M TEUs, it is 4.9 years old and has a remaining lease duration of 7.3 years (see slide 9 of the Investor Presentation). From the above, we can see that for a purchase price that assigns a $3.8B fully diluted market capitalization, the buyers are taking a minimal financial risk. The payback has already been contracted, and the remaining useful lives of the fleet plus APR Energy's earnings are pure gravy. Given the existing owners already control the company, little is gained by the buyout. If successful, owners of 70% of the business can force reluctant shareholders to sell for a price far below what they are likely to realize if they continue to own the business. Furthermore, given that shares are trading below $12/share, the majority owners could further intensify their ownership by purchasing shares in the open market or via a non-compulsory tender offer.

Shareholder Returns

ATCOUS InfrastructureUS Market
7D19.6%14.3%1.1%
1Y6.5%-2.8%-13.0%

Return vs Industry: ATCO exceeded the US Infrastructure industry which returned -3.8% over the past year.

Return vs Market: ATCO exceeded the US Market which returned -12.9% over the past year.

Price Volatility

Is ATCO's price volatile compared to industry and market?
ATCO volatility
ATCO Average Weekly Movement8.5%
Infrastructure Industry Average Movement10.1%
Market Average Movement7.9%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.2%

Stable Share Price: ATCO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: ATCO's weekly volatility (9%) 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$3.89b
Earnings (TTM)US$467.90m
Revenue (TTM)US$1.51b

8.3x

P/E Ratio

2.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ATCO income statement (TTM)
RevenueUS$1.51b
Cost of RevenueUS$435.80m
Gross ProfitUS$1.07b
Other ExpensesUS$602.10m
EarningsUS$467.90m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 09, 2022

Earnings per share (EPS)1.69
Gross Margin71.06%
Net Profit Margin31.07%
Debt/Equity Ratio108.2%

How did ATCO perform over the long term?

See historical performance and comparison

Dividends

3.6%

Current Dividend Yield

26%

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/Revenue6.8x
Enterprise Value/EBITDA10.2x
PEG Ratio1.8x

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 Average10.2x
R Ryder System
5.6x-22.5%US$4.1b
SNDR Schneider National
9.4x-6.0%US$4.4b
HUBG Hub Group
8.8x-12.8%US$2.8b
FWRD Forward Air
17.1x3.6%US$2.8b
ATCO Atlas
8.3x4.6%US$3.9b

Price-To-Earnings vs Peers: ATCO is good value based on its Price-To-Earnings Ratio (8.3x) compared to the peer average (10.2x).


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 (8.3x) compared to the North American Infrastructure industry average (10.5x)


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 Ratio8.3x
Fair PE Ratio12.1x

Price-To-Earnings vs Fair Ratio: ATCO is good value based on its Price-To-Earnings Ratio (8.3x) compared to the estimated Fair Price-To-Earnings Ratio (12.1x).


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 ($14.06) is trading below our estimate of fair value ($57.89)

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 more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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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

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


4.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ATCO's forecast earnings growth (4.6% per year) is above the savings rate (1.9%).

Earnings vs Market: ATCO's earnings (4.6% per year) are forecast to grow slower than the US market (12.8% per year).

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

Revenue vs Market: ATCO's revenue (10.8% per year) is forecast to grow faster than the US market (8% per year).

High Growth Revenue: ATCO's revenue (10.8% 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

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


32.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ATCO has high quality earnings.

Growing Profit Margin: ATCO's current net profit margins (31.1%) are higher than last year (27.7%).


Past Earnings Growth Analysis

Earnings Trend: ATCO has become profitable over the past 5 years, growing earnings by 32.9% per year.

Accelerating Growth: ATCO's earnings growth over the past year (30.3%) is below its 5-year average (32.9% per year).

Earnings vs Industry: ATCO earnings growth over the past year (30.3%) exceeded the Infrastructure industry 18.9%.


Return on Equity

High ROE: ATCO's Return on Equity (11.8%) is considered low.


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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 ($572.3M) do not cover its short term liabilities ($1.3B).

Long Term Liabilities: ATCO's short term assets ($572.3M) do not cover its long term liabilities ($5.4B).


Debt to Equity History and Analysis

Debt Level: ATCO's net debt to equity ratio (101.8%) is considered high.

Reducing Debt: ATCO's debt to equity ratio has reduced from 158.5% to 108.2% over the past 5 years.

Debt Coverage: ATCO's debt is well covered by operating cash flow (20%).

Interest Coverage: ATCO's interest payments on its debt are well covered by EBIT (5.4x 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


3.56%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ATCO's dividend (3.56%) is higher than the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: ATCO's dividend (3.56%) is low compared to the top 25% of dividend payers in the US market (4.1%).


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 reasonably low payout ratio (26.3%), 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 12.1%.


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$3.893b
  • Shares outstanding: 276.90m
  • 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 Analysis2022/08/08 00:00
End of Day Share Price2022/08/08 00:00
Earnings2022/03/31
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.