Fortis (FTS) AI Stock Analysis

• Market Cap: C$32.39B
• Dividend Yield: 3.88%
• Average Volume (3M): 2.13M
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.46
• Revenue Growth: -0.08%
• EPS Growth: 4.76%
• Country: CA
• Employees: 9,598
• Sector: Utilities
• Sector Strength: 84
• Industry: Regulated Utilities
• EPS (TTM): 3.24
• Shares Outstanding: 499,300,000
• 10 Day Avg. Volume: 2,335,654
• 30 Day Avg. Volume: 2,127,249
• PEG Ratio: 4.16
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.83
• Price to Cash Flow (P/CF): 6.10
• P/FCF Ratio: 213.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$64.79
• Price Target Upside: 1.19% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

Fortis Inc. is a solid performer in the regulated utilities sector, showing strong profitability and stable financial health. Its strategic focus on growth, as evidenced by significant capital investments, positions it well for future expansion. The positive technical indicators further support the stock's upward momentum. However, the high capital expenditures impacting free cash flow and regulatory challenges are areas to monitor. Overall, Fortis presents a compelling investment opportunity with reliable dividend income and a sound growth strategy.

Positive Factors

Earnings Growth

The Q4/24 earnings report is consistent with the view that EPS growth has returned to the company with potential upside to growth due to favorable regulatory conditions.

Regulatory Environment

The outlook for Fortis' Arizona utilities is improving, with potential for additional generation spending and favorable regulatory reforms.

Negative Factors

Earnings Growth Concerns

Fortis is seen to have below-average EPS growth, which is concerning given its current premium valuation.

Fortis Business Overview & Revenue Model

Company Description

Fortis Inc. is a leading North American utility company headquartered in St. John's, Newfoundland and Labrador, Canada. The company operates primarily in the regulated electric and gas utility industries, serving customers across Canada, the United States, and the Caribbean. Fortis is known for its commitment to providing safe, reliable, and affordable energy, with a strong focus on sustainability and renewable energy integration.

How the Company Makes Money

Fortis makes money through its regulated utility operations, which provide electric and gas services to millions of customers. The company's revenue model is heavily reliant on regulated utility rates, which are approved by government regulatory bodies and provide a stable and predictable income stream. Key revenue streams include electricity generation and distribution, natural gas distribution, and transmission operations. Fortis also benefits from strategic acquisitions and investments in renewable energy projects, which contribute to its earnings. Additionally, the company may engage in partnerships with other utility providers or energy companies to enhance its service offerings and expand its market presence.

Fortis Financial Statement Overview

Summary

Fortis demonstrates strong profitability and stable financial health typical of a regulated utility. The company effectively balances leverage with a solid equity position, though its significant capital expenditures impact free cash flow. Overall, Fortis reflects a well-managed utility with consistent earnings and operational efficiency, despite the challenges posed by its capital-intensive nature.

Income Statement

Fortis exhibits strong profitability with a consistent increase in net income over recent years. The gross profit margin for 2024 is approximately 71.8%, and the net profit margin is about 14.6%, highlighting effective cost management and operational efficiency. Revenue growth has been moderate, with a recent slight decline, but overall, the company maintains a stable financial performance. EBIT and EBITDA margins are robust at 28.6% and 47.9%, respectively, indicating solid operating health.

Balance Sheet

Fortis has a relatively high debt-to-equity ratio of 1.42, suggesting leverage is significant, but manageable given the industry context. The equity ratio stands at 32.4%, indicating a strong capital base. Return on equity is healthy at 7.1%, reflecting good returns for shareholders despite high debt levels. Overall, the company maintains a stable balance sheet with adequate equity backing its assets.

Cash Flow

The cash flow statement shows some challenges, particularly with free cash flow being negative at -$1.336 billion, indicating high capital expenditures typical of the utilities sector. Operating cash flow is strong relative to net income, with a ratio of 2.31, suggesting efficient cash generation from operations. However, the free cash flow to net income ratio is negative, underscoring the impact of capital spending.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
11.51B	11.52B	11.04B	9.45B	8.94B
	Gross Profit
8.26B	4.86B	7.09B	6.50B	6.37B
	EBIT
3.29B	3.08B	2.74B	2.47B	2.51B
	EBITDA
5.51B	5.15B	4.50B	4.02B	3.97B
	Net Income Common Stockholders
1.68B	1.57B	1.39B	1.29B	1.27B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
220.00M	625.00M	209.00M	131.00M	249.00M
	Total Assets
73.49B	65.92B	64.25B	57.66B	55.48B
	Total Debt
33.70B	30.03B	29.04B	25.95B	24.86B
	Net Debt
33.48B	29.40B	28.83B	25.82B	24.61B
	Total Liabilities
47.63B	42.59B	41.41B	36.74B	35.20B
	Stockholders Equity
23.81B	21.50B	21.03B	19.29B	18.70B
Cash Flow		Free Cash Flow
-1.34B	-624.00M	-791.00M	-479.00M	-1.34B
	Operating Cash Flow
3.88B	3.54B	3.07B	2.91B	2.70B
	Investing Cash Flow
-5.39B	-3.74B	-4.06B	-3.49B	-4.13B
	Financing Cash Flow
1.06B	613.00M	1.03B	451.00M	1.33B

Fortis Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 64.03
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FTS, the sentiment is Positive. The current price of 64.03 is above the 20-day moving average (MA) of 63.05, above the 50-day MA of 61.26, and above the 200-day MA of 58.44, indicating a bullish trend. The MACD of 0.77 indicates Negative momentum. The RSI at 58.41 is Neutral, neither overbought nor oversold. The STOCH value of 77.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FTS.

Fortis Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTS	79 Outperform	C$32.39B	19.80	7.47%	3.88%	-0.08%	4.76%
ENB	73 Outperform	$134.29B	25.79	8.63%	6.21%	24.95%	-17.19%
EMA	72 Outperform	$17.62B	34.88	4.50%	5.01%	7.16%	-52.28%
CU	70 Neutral	C$7.12B	23.48	6.93%	5.21%	-1.42%	-36.31%
Sector *	65 Neutral	$11.91B	15.60	6.55%	4.41%	7.00%	0.55%
BEP.UN	58 Neutral	$22.08B	―	-4.87%	6.21%	22.01%	-183.73%
AQN	44 Neutral	$5.20B	―	1.65%	7.13%	-6.41%	-282.03%

Fortis Corporate Events

Fortis Inc. Files 2024 Year-End Financial Disclosure Documents

Fortis Inc. has filed its audited Consolidated Financial Statements, Management Discussion and Analysis, Form 40-F, and 2024 Annual Information Form with Canadian and U.S. securities regulatory authorities for the year ending December 31, 2024. This filing supports transparency and compliance, potentially impacting investor relations as documents are made available electronically for stakeholders. The Management Information Circular for the upcoming Annual Meeting of Shareholders is expected by late March.

Fortis Inc. Reports Strong 2024 Financial Results with Continued Dividend Growth

Fortis Inc. reported strong financial results for 2024, with annual net earnings reaching $1.6 billion, marking a 6% growth in adjusted net earnings per share. The company’s robust performance was driven by rate base growth and strategic capital expenditures totaling $5.2 billion. Despite some challenges, such as increased finance costs and unrealized losses on derivatives, Fortis maintained a steady increase in its common share dividend for the 51st consecutive year. The company remains committed to its $26 billion five-year capital plan, aiming to achieve annual dividend growth of 4-6% through 2029, thereby reinforcing its industry position and delivering value to stakeholders.

Fortis Inc. Declares Second Quarter 2025 Dividends

Fortis Inc. has announced dividends for the second quarter of 2025, declaring specific per-share dividends for various series of its First Preference Shares as well as its Common Shares, all payable on June 1, 2025, to shareholders of record by May 16, 2025. This announcement underscores Fortis’s commitment to providing returns to its shareholders and highlights its ongoing role as a stable entity in the utility industry, offering eligible dividends that benefit from federal and provincial tax credits.