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

• Market Cap: C$5.74B
• Dividend Yield: 3.92%
• Average Volume (3M): 230.60K
• Price to Earnings (P/E): 13.0
• Beta (1Y): 0.42
• Revenue Growth: 7.64%
• EPS Growth: 14.22%
• Country: CA
• Employees: 20,582
• Sector: Utilities
• Sector Strength: 81
• Industry: Diversified Utilities
• EPS (TTM): 0.90
• Shares Outstanding: 100,101,494
• 10 Day Avg. Volume: 211,428
• 30 Day Avg. Volume: 230,603
• 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$54.67
• Price Target Upside: 6.49% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 68 Neutral
• Price Target: C$55.00 ▲(7.13% Upside)

ATCO Ltd's overall stock score is driven by strong earnings growth and cash flow as highlighted in the earnings call, which is the most significant factor. Financial performance is solid but hampered by high leverage and cash flow conversion issues. Technical analysis indicates a lack of strong momentum, while valuation metrics are reasonable with an attractive dividend yield.

Positive Factors

Earnings

The strong earnings report signaled a robust start to the year, driven by consistent growth in Alberta utilities and a resilient contribution from ATCO Structures.

Growth Potential

The creation of the ATCO Investments segment is expected to contribute to the company's growth trajectory.

Negative Factors

Market Reaction

Despite strong results and positive revisions, ACO.X shares traded down in the broad utility sell-off.

Stock Performance

ACO.X shares underperformed compared to utility peers despite a positive earnings report and outlook.

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 Cl I NV exhibits strong revenue growth and effective cash management, indicated by solid operating margins and cash flow generation. However, the decrease in net profit margin and moderate leverage pose some profitability and debt management concerns.

Income Statement

The company's income statement shows consistent revenue growth with a TTM (Trailing-Twelve-Months) increase of 1.76% compared to the previous annual period. The gross profit margin is strong at 62.37%, indicating efficient cost management. The EBIT and EBITDA margins are healthy at 27.05% and 44.01% respectively, demonstrating solid operating performance. However, the net profit margin decreased slightly to 8.49% in TTM, suggesting potential profitability challenges.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 2.58, highlighting the company's reliance on debt financing. The return on equity stands at 9.03%, indicating reasonable shareholder returns. The equity ratio is 17.45%, suggesting a balanced approach to asset financing, but there is room for improvement in leveraging equity more effectively.

Cash Flow

Cash flow analysis reveals a strong operating cash flow to net income ratio of 5.62, highlighting effective cash generation relative to profits. The free cash flow to net income ratio is 1.14, indicating robust free cash flow generation. The free cash flow growth rate increased by 23.93% in the TTM, showcasing improved cash management and investment capabilities.

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	2.31B	2.26B	2.27B	1.97B	1.76B	1.75B
Net Income	439.00M	430.00M	432.00M	707.00M	246.00M	497.00M
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	703.00M	576.00M	1.03B	1.07B	1.06B
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	363.00M	393.00M	400.00M	813.00M	518.00M	815.00M
Operating Cash Flow	2.35B	2.20B	1.97B	2.40B	1.86B	1.84B
Investing Cash Flow	-1.95B	-1.80B	-2.58B	-1.50B	-1.38B	-1.06B
Financing Cash Flow	-235.00M	-588.00M	-123.00M	-953.00M	-486.00M	-823.00M

ATCO Ltd Cl I NV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.34
• 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:ACO.X, the sentiment is Positive. The current price of 51.34 is above the 20-day moving average (MA) of 50.87, above the 50-day MA of 50.85, and above the 200-day MA of 48.67, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 55.73 is Neutral, neither overbought nor oversold. The STOCH value of 60.71 is Neutral, 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	68 Neutral	C$9.35B	18.82	10.00%	4.38%	-16.83%	-37.24%
ACO.X	68 Neutral	C$5.74B	12.98	9.50%	3.92%	7.64%	14.22%
CU	68 Neutral	C$7.82B	23.22	7.52%	4.76%	-0.51%	-17.17%
Sector *	67 Neutral	$17.75B	18.23	5.29%	3.57%	7.33%	12.21%
AQN	―	$4.44B	―	1.50%	4.47%	―	―
EMA	―	$14.24B	22.93	7.12%	2.19%	―	―
BIPC	―	$5.13B	―		4.28%	―	―

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.