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

• Market Cap: C$6.60B
• Dividend Yield: 3.62%
• Average Volume (3M): 263.19K
• Price to Earnings (P/E): 49.0
• Beta (1Y): 0.18
• Revenue Growth: 7.75%
• EPS Growth: 11.25%
• Country: CA
• Employees: 20,582
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 1.37
• Shares Outstanding: 100,863,235
• 10 Day Avg. Volume: 230,780
• 30 Day Avg. Volume: 263,185
• PEG Ratio: -0.65
• Price to Book (P/B): 1.40
• Price to Sales (P/S): 1.23
• P/FCF Ratio: 27.89
• 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$68.20
• Price Target Upside: 4.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 4.74
• Revenue Forecast (FY): C$5.69B

• Rating: 54 Neutral
• Price Target: C$66.00 ▲(0.90% Upside)
• Action: Reiterated Date: 03/01/26
• Date: Action: Reiterated 03/01/26

The score is driven primarily by weakening 2025 profitability and a more leveraged balance sheet, partially offset by strong operating cash flow. Technicals are supportive due to an established uptrend, but overbought signals add near-term risk. Valuation is a key headwind given the very high P/E relative to recent earnings pressure, despite a moderate dividend yield.

Positive Factors

Operating cash flow resilience

Consistently strong operating cash flow, with a material improvement in 2025, provides durable capacity to service debt, fund maintenance and growth capex, and support dividends. This operating cash generation underpins financial resilience despite earnings volatility.

High, stable EBITDA margins

Sustained EBITDA margins near 40% indicate structurally profitable core operations and cost leverage. Stable underlying margins support long-term cash flow predictability and provide a buffer to absorb revenue shocks or higher operating costs.

Modest, consistent revenue growth

Steady mid-single-digit revenue growth reflects ongoing demand and an established market position. Predictable top-line expansion supports gradual scale benefits, offering a foundation for margin recovery and steady capacity utilization over the medium term.

Negative Factors

Elevated leverage

A materially higher leverage profile reduces financial flexibility and raises refinancing and interest-rate risk. With debt-to-equity near 3x, the company is more sensitive to profitability swings, limiting capacity to fund strategic investments or absorb adverse shocks without raising cost of capital.

Sharp profitability deterioration

A steep drop in net income and margin compression undermines retained earnings and the firm's ability to generate returns on capital. Persistent low net margins would erode ROE and constrain the company’s ability to deleverage, invest, or sustain shareholder distributions over time.

Volatile free cash flow / low conversion

Inconsistent free cash flow and weak conversion of earnings into surplus cash make long-term capital allocation harder. Volatility limits reliable discretionary investment, reduces buffers for debt paydown, and raises execution risk for long-duration infrastructure projects.

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

Operating cash flow remains strong and improved in 2025, but profitability weakened sharply (net income down to ~150M and net margin ~2.9% vs ~8–9% prior years). Leverage is elevated and rising (debt-to-equity ~3.0x), reducing flexibility and pulling returns down (ROE ~3.3% in 2025).

Income Statement

Revenue has grown modestly since 2020, with a small uptick in 2024 and flat growth in 2025. Profitability, however, weakened materially in 2025: net income fell to 150M from ~430M in 2023–2024, and net margin compressed to ~2.9% from ~8–9% previously. While EBITDA margin remains strong and stable (~39–41%), the sharp deterioration in gross profit and EBIT in 2025 points to pressure below the top line and a less favorable earnings quality versus the prior two years.

Balance Sheet

The balance sheet is leveraged, with debt-to-equity rising to ~3.0x in 2025 from ~2.3–2.6x in 2021–2024, alongside increasing total debt. Equity has been relatively stable, but returns on equity have dropped meaningfully (to ~3.3% in 2025 from ~9–10% in 2023–2024), reflecting weaker profitability against a sizable capital base. Overall asset growth is steady, but the higher leverage profile reduces financial flexibility and increases sensitivity to earnings volatility.

Cash Flow

Operating cash flow is consistently strong and improved in 2025 (1.93B vs 1.66B in 2024), supporting debt service capacity. Free cash flow is volatile—negative in 2024, modestly positive in 2023, very strong in 2022, and positive again in 2025 (227M) with a large rebound versus 2024—suggesting uneven capital spending and/or working-capital swings. While cash generation looks resilient at the operating line, the relatively low conversion of free cash flow versus earnings in 2025 indicates limited surplus cash after investment needs.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.14B	4.94B	4.74B	4.98B	4.29B
Gross Profit	1.34B	3.11B	3.03B	3.12B	2.72B
EBITDA	2.04B	1.94B	1.95B	2.03B	1.62B
Net Income	150.00M	430.00M	432.00M	370.00M	246.00M
Balance Sheet
Total Assets	27.67B	26.72B	25.36B	24.14B	23.00B
Cash, Cash Equivalents and Short-Term Investments	1.36B	713.00M	592.00M	1.03B	1.09B
Total Debt	13.38B	11.98B	11.17B	10.20B	10.15B
Total Liabilities	19.32B	18.01B	16.86B	15.79B	15.05B
Stockholders Equity	4.52B	4.63B	4.42B	4.38B	4.11B
Cash Flow
Free Cash Flow	227.00M	-27.00M	57.00M	535.00M	263.00M
Operating Cash Flow	1.93B	1.66B	1.48B	1.97B	1.46B
Investing Cash Flow	-1.90B	-1.80B	-2.58B	-1.50B	-1.38B
Financing Cash Flow	846.00M	-55.00M	362.00M	-527.00M	-85.00M

ATCO Ltd Cl I NV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 65.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 65.41 is above the 20-day moving average (MA) of 61.89, above the 50-day MA of 58.81, and above the 200-day MA of 52.58, indicating a bullish trend. The MACD of 1.89 indicates Negative momentum. The RSI at 75.89 is Negative, neither overbought nor oversold. The STOCH value of 91.24 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
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CPX	64 Neutral	C$9.80B	22.26	9.40%	4.44%	-2.99%	-32.11%
BIPC	59 Neutral	C$8.83B	-27.85	―	4.56%	3.29%	76.89%
CU	58 Neutral	C$13.04B	310.36	8.84%	4.33%	-0.94%	25.64%
TA	55 Neutral	C$5.39B	-28.38	-9.02%	1.46%	-11.00%	-227.07%
ACO.X	54 Neutral	C$6.60B	48.97	9.32%	3.62%	7.75%	11.25%
AQN	54 Neutral	C$7.30B	-173.67	2.04%	4.32%	-4.72%	96.98%

ATCO Ltd Cl I NV Corporate Events

ATCO lifts adjusted earnings in 2025 as new contracts and major pipeline project bolster growth

ATCO reported 2025 adjusted earnings of $518 million, up $37 million from 2024, driven by its core operations, while IFRS earnings fell sharply to $150 million due to non-cash impairments and write-offs that produced a fourth-quarter loss. The mixed results highlight a solid underlying business contrasted with significant accounting charges that will matter for investors focused on reported profitability.

Operationally, ATCO Structures secured new space rental and modular construction contracts across potash mining in Western Canada, education and data centres in Texas, and defence and mining projects in Western Australia, adding millions in sale and lease revenue and advancing a major U.S. mining lodge project. Frontec’s ARCTEC joint venture won a rebid to operate and maintain the Alaska Radar System in a contract worth up to $596 million (USD), while Canadian Utilities advanced major Alberta projects, including the $2.9 billion fully contracted Yellowhead natural gas pipeline, for which regulatory approvals and prefunding moves strengthen ATCO’s long-term infrastructure growth pipeline.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$59.00 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 JV Wins $596M, 10-Year U.S. Air Force Alaska Radar System Deal

ATCO Frontec, through its ARCTEC Alaska joint venture with ASRC Federal, has secured a 10-year, roughly $596 million U.S. Air Force contract to operate and maintain the Alaska Radar System starting in September 2026. The deal covers 15 long-range radar sites, two radio sites and associated facilities at Joint Base Elmendorf-Richardson, extending a relationship with the USAF that has been in place since 1994 and reinforcing ATCO’s role in critical defence infrastructure.

The award underscores ATCO Frontec’s and ASRC Federal’s track record in delivering mission-critical services in remote, extreme environments, including radar surveillance systems in the Canadian Arctic and large-scale logistics and lodging support for U.S. defence and emergency operations. By deepening its presence in North American aerospace surveillance, ATCO strengthens its defence services portfolio and long-term revenue visibility, while contributing to U.S. and Canadian airspace security and civil aviation safety.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$59.00 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 to Unveil 2025 Year-End Results on February 26

ATCO Ltd. announced it will release its financial results for the year ended December 31, 2025 on February 26, 2026, with full financial statements and management’s discussion and analysis to be made available on its website and via a newswire distribution. The company will host a same-day teleconference and webcast led by senior executives, including a question-and-answer session for investment analysts, providing stakeholders an opportunity to gain deeper insight into the performance and strategic direction of its diversified global energy, infrastructure and services operations.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$59.00 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 Extends 33-Year Dividend Growth Streak With 3% Increase for 2026

ATCO Ltd., a diversified global provider of energy, infrastructure, housing and support services, has increased its common share dividend for the 33rd consecutive year, underscoring the company’s long-standing focus on stable, shareholder-friendly capital returns within the essential services sector. The board declared a first-quarter 2026 dividend of 51.96 cents per Class I non-voting and Class II voting share, a 3% rise from the prior quarterly rate, payable on March 31, 2026 to shareholders of record on February 26, 2026, and designated the payments as eligible dividends under Canadian tax law, reinforcing ATCO’s reputation for consistent dividend growth and financial resilience across its broad portfolio of regulated and contracted operations.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$61.00 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. Completes Share Exchange Arrangement

ATCO Ltd. announced the completion of an exchange arrangement for Class II voting shares held by non-controlling shareholders, excluding Sentgraf Enterprises Ltd. The arrangement, approved by shareholders and the Court of King’s Bench of Alberta, involved exchanging each Class II share for 1.15 Class I non-voting shares. This move will result in the delisting of Class II shares from the Toronto Stock Exchange, while Class I shares will continue trading. This strategic shift aims to streamline ATCO’s share structure and may impact shareholder dynamics and market perceptions.

The most recent analyst rating on ($TSE:ACO.X) stock is a Hold with a C$58.00 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.