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

• Market Cap: C$5.56B
• Dividend Yield: 3.66%
• Average Volume (3M): 263.19K
• Price to Earnings (P/E): 14.4
• Beta (1Y): 0.17
• Revenue Growth: 7.75%
• EPS Growth: 11.25%
• Country: CA
• Employees: 20,582
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.91
• Shares Outstanding: 100,786,580
• 10 Day Avg. Volume: 230,780
• 30 Day Avg. Volume: 263,185
• PEG Ratio: 47.41
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 1.08
• P/FCF Ratio: -197.67
• 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$58.83
• Price Target Upside: 6.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: C$58.00 ▲(5.11% Upside)

ATCO Ltd. shows strong financial performance with solid revenue growth and operational efficiency. The stock's valuation is appealing with a low P/E ratio and high dividend yield. Corporate events further enhance its strategic positioning. However, high leverage and mixed technical indicators present some risks.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for ATCO's services and products, supporting long-term business stability and expansion.

Cash Flow Strength

Strong operating cash flow enhances ATCO's ability to fund strategic investments and manage debt, supporting sustainable growth.

Strategic Investments

Strategic investments in infrastructure like Neltume Ports diversify revenue streams and strengthen market position.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting ATCO's ability to invest and grow.

Declining Free Cash Flow

Declining free cash flow may restrict ATCO's capacity to fund new projects or reduce debt, affecting long-term financial health.

Alberta Utilities ROE Reset

The ROE reset in Alberta utilities could reduce profitability, impacting ATCO's earnings from regulated operations.

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 primarily through its regulated utility operations, which include electricity and natural gas distribution services. The company earns a significant portion of its income from providing essential utility services to residential, commercial, and industrial customers, benefiting from stable demand and regulated pricing structures. Additionally, ATCO's modular construction and infrastructure services contribute to its revenue, particularly through contracts for custom-built facilities and infrastructure projects. The company also invests in renewable energy projects, which provide additional income through power generation and government incentives. Strategic partnerships with various stakeholders, including government entities and private sector clients, help facilitate large-scale projects and secure long-term contracts, thus enhancing its revenue stability.

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.

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	5.14B	4.94B	4.74B	4.98B	4.29B	3.94B
Gross Profit	2.83B	3.11B	3.03B	3.12B	2.72B	2.59B
EBITDA	2.07B	1.94B	1.95B	2.03B	1.62B	1.62B
Net Income	431.00M	430.00M	432.00M	370.00M	246.00M	252.00M
Balance Sheet
Total Assets	27.74B	26.72B	25.36B	24.14B	23.00B	22.20B
Cash, Cash Equivalents and Short-Term Investments	1.29B	713.00M	592.00M	1.03B	1.09B	1.10B
Total Debt	12.95B	11.98B	11.17B	10.20B	10.15B	9.72B
Total Liabilities	18.88B	18.01B	16.86B	15.79B	15.05B	14.35B
Stockholders Equity	4.75B	4.63B	4.42B	4.38B	4.11B	4.05B
Cash Flow
Free Cash Flow	48.00M	-27.00M	57.00M	535.00M	263.00M	490.00M
Operating Cash Flow	1.90B	1.66B	1.48B	1.97B	1.46B	1.43B
Investing Cash Flow	-1.93B	-1.80B	-2.58B	-1.50B	-1.38B	-1.06B
Financing Cash Flow	663.00M	-55.00M	362.00M	-527.00M	-85.00M	-410.00M

ATCO Ltd Cl I NV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 55.18
• 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 55.18 is above the 20-day moving average (MA) of 54.26, above the 50-day MA of 53.79, and above the 200-day MA of 50.30, indicating a bullish trend. The MACD of 0.32 indicates Negative momentum. The RSI at 58.63 is Neutral, neither overbought nor oversold. The STOCH value of 87.97 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
CU	72 Outperform	C$11.38B	21.29	8.84%	4.38%	-0.94%	25.64%
ACO.X	69 Neutral	C$5.56B	14.38	9.32%	3.66%	7.75%	11.25%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CPX	64 Neutral	C$9.30B	21.18	9.40%	4.44%	-2.99%	-32.11%
AQN	54 Neutral	C$6.55B	-155.94	2.04%	4.32%	-4.72%	96.98%
BIPC	54 Neutral	C$8.39B	-42.22	―	4.57%	3.29%	76.89%
TA	49 Neutral	C$5.12B	-26.55	-8.42%	1.48%	-11.00%	-227.07%

ATCO Ltd Cl I NV Corporate Events

ATCO Ltd. Reports Increased Q3 Earnings and Expands Market Presence

ATCO Ltd. reported an increase in third-quarter 2025 adjusted earnings, reaching $103 million, up from $91 million in the same period of 2024. The company has been expanding its market presence through various contracts in the US, Canada, and Australia, enhancing its position in the energy and infrastructure sectors. Notable developments include a $179 million contract for a dormitory lodge in Idaho and significant investments in regulated utilities, with major projects like the Yellowhead Pipeline Project and the Central East Transfer-Out Project progressing well. These initiatives are expected to strengthen ATCO’s industry positioning and support renewable energy integration in Alberta.

ATCO Ltd. Appoints Former Husky CEO Rob Peabody to Board

ATCO Ltd. has appointed Rob Peabody, former CEO of Husky Energy, to its Board of Directors. Peabody’s extensive experience in the oil, gas, and chemicals industries, along with his strategic leadership skills, is expected to bring valuable insights to ATCO as it continues to evolve and invest in essential services globally. This appointment is likely to strengthen ATCO’s strategic positioning in the industry and enhance its operational capabilities.

ATCO Ltd. Proposes Share Exchange to Streamline Capital Structure

ATCO Ltd. has proposed an exchange for its Class II voting shares, aiming to simplify its capital structure and improve liquidity. The proposal offers a 15% premium on existing conversion rights and tax benefits, while allowing continued participation in ATCO’s growth. The arrangement requires approval from Class II shareholders and regulatory bodies, with significant support already indicated.

ATCO Structures Secures $179M Contract for Idaho Mining Project

ATCO Structures has secured a $179 million CAD contract to supply and install modular housing for over 1,000 workers at Perpetua Resources’ Stibnite Gold Project in Idaho. This contract is a significant step in ATCO’s U.S. expansion strategy, with manufacturing and site preparation beginning in late 2025 and installation slated for 2026. The project is crucial for Perpetua Resources as it supports the only U.S. reserve of antimony, a mineral vital for military applications, thereby receiving backing from the U.S. Department of War. The initiative underscores ATCO’s expertise in modular construction and its role in supporting large-scale industrial projects in challenging environments.

ATCO Ltd. to Announce Q3 2025 Financial Results

ATCO Ltd. announced it will release its third-quarter 2025 financial results on November 7, 2025. The company will host a live teleconference and webcast to discuss the results, with key executives participating. This announcement is significant as it provides stakeholders with insights into ATCO’s financial performance and strategic direction, potentially impacting its market positioning and investor confidence.

ATCO Ltd. Declares Quarterly Dividends for 2025

ATCO Ltd. has announced the declaration of quarterly dividends for its Class I Non-Voting and Class II Voting shares, both set at $0.5045 per share, to be paid on December 31, 2025. This announcement reflects ATCO’s ongoing commitment to shareholder returns and its stable financial position, which is supported by its diverse operations across multiple sectors. The declared dividends are eligible under the Income Tax Act of Canada, indicating potential tax benefits for shareholders.