Stock of the Day

November 6, 2019

Fortis (FTS)

$47.69
-$0.40 (-0.8%)
Market Cap: $23.92B

About Fortis

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 447,000 retail customers in southeastern Arizona; and 103,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,408 megawatts (MW), including 68 MW of solar capacity and 250 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,087,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 592,000 customers in southern and central Alberta; owns four hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 145 MW; and on Prince Edward Island with a generating capacity of 90 MW. Additionally, it provides integrated electric utility service to approximately 69,000 customers in Ontario; approximately 275,000 customers in Newfoundland and Labrador; approximately 34,000 customers on Grand Cayman, Cayman Islands; and approximately 17,000 customers on certain islands in Turks and Caicos. It also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,500 circuit Kilometers (km) of distribution lines; and approximately 51,600 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.

Fortis Bull Case

Here are some ways that investors could benefit from investing in Fortis Inc.:

  • Fortis Inc. has recently received a positive earnings forecast, with analysts projecting earnings per share (EPS) of $2.45 for FY2025, indicating growth potential.
  • The current stock price is around $46.99, which may present a buying opportunity for investors looking for utility stocks.
  • Fortis Inc. reported a solid return on equity of 7.09%, suggesting effective management and profitability in generating returns for shareholders.
  • The company has a stable net margin of 14.12%, indicating that it retains a good portion of its revenue as profit, which is attractive for income-focused investors.
  • Analysts have set a consensus price target of $72.00, suggesting potential upside from the current stock price, which could be appealing for growth-oriented investors.

Fortis Bear Case

Investors should be bearish about investing in Fortis Inc. for these reasons:

  • Fortis Inc. reported a revenue of $2.31 billion, which fell short of analysts' expectations of $3.42 billion, indicating potential challenges in meeting growth targets.
  • The company experienced a decline in EPS from the previous year, where it earned $0.93, raising concerns about its ability to maintain profitability.
  • Two analysts have rated the stock with a sell rating, which may signal caution for potential investors regarding the stock's future performance.
  • The stock has a relatively high P/E ratio of 19.93, which could suggest that it is overvalued compared to its earnings, making it less attractive for value investors.
  • Fortis Inc. has a debt-to-equity ratio of 1.30, indicating a higher level of debt relative to equity, which could pose risks in times of rising interest rates or economic downturns.
← Previous Stock of the DayNext Stock of the Day →

Recent News