ATCO Ltd Cl I NV (ACO.X) AI Stock Analysis

• Market Cap: C$5.71B
• Dividend Yield: 3.96%
• Average Volume (3M): 242.69K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.34
• Revenue Growth: 7.64%
• EPS Growth: 14.22%
• Country: CA
• Employees: 20,582
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.90
• Shares Outstanding: 100,101,494
• 10 Day Avg. Volume: 249,782
• 30 Day Avg. Volume: 242,692
• PEG Ratio: 47.41
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 1.08
• P/FCF Ratio: 13.58
• 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$56.33
• Price Target Upside: 11.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 68 Neutral
• Price Target: C$54.00 ▲(6.68% Upside)

ATCO Ltd's overall stock score is primarily driven by its strong earnings growth and attractive valuation, with a low P/E ratio and high dividend yield. Financial performance is solid but hampered by high leverage and declining free cash flow. Technical indicators suggest a lack of strong momentum, while the earnings call provides a cautiously optimistic outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability and expansion potential.

Strong Cash Flow

Robust cash flow enhances financial flexibility, enabling strategic investments and reducing reliance on external financing, thus supporting sustainable growth.

Successful Business Segments

Strong performance in key segments like ATCO Structures reflects operational efficiency and market competitiveness, contributing to overall profitability.

Negative Factors

High Leverage

High leverage can increase financial risk and limit strategic flexibility, potentially impacting the company's ability to navigate economic downturns.

Declining Free Cash Flow

Declining free cash flow may constrain the company's ability to fund new projects or reduce debt, affecting long-term financial health and growth prospects.

Alberta Utilities ROE Reset

The ROE reset in Alberta utilities could reduce profitability in a key segment, impacting overall earnings and strategic financial planning.

ATCO Ltd Cl I NV Business Overview & Revenue Model

Company Description

ATCO Ltd., together with its subsidiaries, provides housing, logistics and transportation, agriculture, water, real estate, and energy and energy infrastructure solutions in Canada, Australia, and internationally. The company offers workforce and residential housing; modular facilities; construction and site support; workforce lodging; facility operations and maintenance; defense operations; and disaster and emergency management services. It also provides commercial real estate services, including sale of commercial and industrial properties; and bulk cargo and port operation services, as well as operates container port facilities. The company's portfolio includes 14 commercial real estate properties, including 417,000 square feet of office property, 60,000 square feet of industrial property, and 315 acres of land. In addition, it engages in electricity generation, distribution, transmission, and related infrastructure services; natural gas distribution; owns and operates natural gas transmission pipelines in Alberta, Saskatchewan, and northern regions of Canada, as well as in Western Australia; and builds, owns, and operates non-regulated industrial water, natural gas storage, natural gas liquids storage, and natural gas related infrastructure to serve the midstream and petrochemical sectors. Further, it sells electricity and natural gas to residential and commercial customers; and provides natural gas appliance demonstrations and small cooking schools for homemakers. ATCO Ltd. was founded in 1947 and is headquartered in Calgary, Canada. ATCO Ltd. operates as a subsidiary of Sentgraf Enterprises Ltd.

How the Company Makes Money

ATCO Ltd generates revenue through a variety of channels. Its utility operations, which include electricity and natural gas transmission and distribution, are regulated and provide a stable revenue stream through customer billing for energy consumption and usage fees. The structures & logistics segment contributes to revenue by offering modular building solutions and related services, often for remote or temporary projects. The energy segment earns through the generation and sale of electricity, as well as retail energy sales to residential and commercial customers. ATCO's transportation business involves providing logistical support and transportation services, while the company also explores opportunities in renewable energy and sustainable infrastructure, which could contribute to future revenue growth. Key factors contributing to ATCO's earnings include long-term contracts, government regulation, and strategic partnerships with other energy companies.

ATCO Ltd Cl I NV Financial Statement Overview

Summary

ATCO Ltd demonstrates solid revenue growth and operational efficiency, as seen in its income statement. However, the high leverage indicated in the balance sheet could pose financial risks if not managed carefully. Cash flow management needs improvement, particularly in converting net income into free cash flow. Overall, the company is performing well but should focus on reducing debt and improving free cash flow generation.

Income Statement

ATCO Ltd has shown a consistent revenue growth trend, with a notable increase in the TTM period. The gross profit margin remains strong, indicating efficient cost management. However, the net profit margin has slightly decreased over time, suggesting increased expenses or other financial pressures. The EBIT and EBITDA margins are robust, reflecting solid operational performance.

Balance Sheet

The company has a high debt-to-equity ratio, which poses a risk of financial leverage. Despite this, the return on equity is relatively stable, indicating effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced approach to financing assets through equity.

Cash Flow

Operating cash flow is strong, with a healthy coverage ratio over net income. However, the free cash flow has shown a declining trend, which could impact future investments or debt repayments. The free cash flow to net income ratio indicates that a smaller portion of net income is being converted into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.08B	4.94B	4.74B	4.98B	4.29B	3.94B
Gross Profit	3.15B	3.11B	3.03B	3.12B	2.72B	2.59B
EBITDA	2.00B	1.94B	1.95B	2.03B	1.62B	1.62B
Net Income	439.00M	430.00M	432.00M	370.00M	246.00M	252.00M
Balance Sheet
Total Assets	26.80B	26.72B	25.36B	24.14B	23.00B	22.20B
Cash, Cash Equivalents and Short-Term Investments	785.00M	713.00M	592.00M	1.03B	1.09B	1.10B
Total Debt	12.20B	11.98B	11.17B	10.20B	10.15B	9.72B
Total Liabilities	17.95B	18.01B	16.86B	15.79B	15.05B	14.35B
Stockholders Equity	4.73B	4.63B	4.42B	4.38B	4.11B	4.05B
Cash Flow
Free Cash Flow	-55.00M	-27.00M	57.00M	535.00M	263.00M	490.00M
Operating Cash Flow	1.81B	1.66B	1.48B	1.97B	1.46B	1.43B
Investing Cash Flow	-1.95B	-1.80B	-2.58B	-1.50B	-1.38B	-1.06B
Financing Cash Flow	301.00M	-55.00M	362.00M	-527.00M	-85.00M	-410.00M

ATCO Ltd Cl I NV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 50.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ACO.X, the sentiment is Positive. The current price of 50.62 is above the 20-day moving average (MA) of 49.08, above the 50-day MA of 49.67, and above the 200-day MA of 48.55, indicating a bullish trend. The MACD of 0.24 indicates Negative momentum. The RSI at 65.18 is Neutral, neither overbought nor oversold. The STOCH value of 91.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ACO.X.

ATCO Ltd Cl I NV Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CPX	70 Outperform	C$10.69B	21.53	10.00%	3.85%	-16.83%	-37.24%
ACO.X	68 Neutral	C$5.71B	12.94	9.50%	3.96%	7.64%	14.22%
EMA	67 Neutral	C$19.99B	22.67	7.12%	5.50%	10.65%	14.09%
CU	66 Neutral	C$7.98B	23.67	7.52%	4.70%	-0.51%	-17.17%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
BIPC	56 Neutral	$7.94B	―	89.66%	5.14%	14.59%	-202.66%
AQN	50 Neutral	C$6.21B	―	1.50%	4.53%	-6.96%	-1235.30%

ATCO Ltd Cl I NV Corporate Events

ATCO Ltd. Reports Strong Q2 2025 Earnings and Strategic Growth Initiatives

ATCO Ltd. reported an increase in second-quarter 2025 adjusted earnings to $101 million, reflecting growth in its operations. The company expanded its market presence through strategic initiatives, including new contracts in Canada and the U.S., and a new manufacturing facility in Australia. Canadian Utilities invested heavily in regulated utilities, advancing significant projects like the Yellowhead Pipeline and CETO, which are crucial for energy infrastructure development. ATCO EnPower benefited from favorable market conditions, boosting its natural gas storage revenues. The company’s strategic developments are expected to enhance its industry positioning and stakeholder value.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

ATCO Ltd. to Announce Q2 2025 Financial Results

ATCO Ltd. announced it will release its second-quarter financial results for 2025 on July 31. The company will host a live teleconference and webcast to discuss the results, featuring key executives. This announcement is significant as it provides stakeholders with insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and investor confidence.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

ATCO Ltd. Declares Quarterly Dividends for 2025

ATCO Ltd.’s Board of Directors has declared quarterly dividends for its Class I Non-Voting and Class II Voting shares, each amounting to $0.5045 per share, payable on September 30, 2025. This announcement reinforces ATCO’s commitment to shareholder returns and highlights its financial stability, potentially impacting investor confidence positively.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$49.00 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

ATCO Ltd. Challenges AUC Decision, Upholds Commitment to Cost Savings

ATCO Ltd., a major utility provider in Alberta, has expressed disappointment with the Alberta Utilities Commission’s (AUC) recent decision regarding regulatory rules, which they believe are being interpreted differently than before. Despite this, ATCO remains committed to reducing distribution costs and has already achieved over $500 million in savings for Albertans from 2023 to 2028, maintaining its position as the only utility in Alberta to reduce distribution costs by 8% during the current regulatory term. The company plans to appeal the AUC’s decision and continues to advocate for a fair regulatory framework that ensures affordability and efficiency for customers.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

ATCO’s Efficiency Initiatives to Save Alberta Customers Over $500 Million

ATCO Ltd. announced that its ATCO Gas and ATCO Electric businesses are set to save Alberta utility customers over $500 million in distribution rates from 2023 to 2028, thanks to efficiency measures and cost-saving initiatives. This marks an eight percent reduction in distribution rates, making ATCO the only utility in Alberta to offer such reductions during this period. The initiative underscores ATCO’s commitment to affordability and reliability for its customers, while advocating for a supportive regulatory environment that fosters innovation and efficiency.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

ATCO Ltd. Issues $250 Million in Senior Unsecured Notes

ATCO Ltd. announced the issuance of $250 million in Senior Unsecured Notes with a 3.878% yield, maturing in 2030. The proceeds will be used to repay existing debts and for general corporate purposes, potentially strengthening the company’s financial position and supporting its diverse operations across multiple industries.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.

ATCO Ltd. Announces Successful Director Elections at Annual Meeting

ATCO Ltd. announced the successful election of nine directors at its Annual Meeting of Share Owners, with each nominee receiving over 96% of votes in favor. This election reinforces ATCO’s governance structure as the company continues to address global challenges in energy, housing, and infrastructure, potentially impacting its strategic direction and stakeholder engagement.

The most recent analyst rating on ($TSE:ACO.X) stock is a Buy with a C$52.50 price target. To see the full list of analyst forecasts on ATCO Ltd Cl I NV stock, see the TSE:ACO.X Stock Forecast page.