Fortis (FTS) AI Stock Analysis

• Market Cap: $35.08B
• Dividend Yield: 3.49%
• Average Volume (3M): 1.34M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 0.30
• Revenue Growth: 4.22%
• EPS Growth: 6.63%
• Country: CA
• Employees: 9,800
• Sector: Utilities
• Sector Strength: 81
• Industry: Regulated Electric
• EPS (TTM): 0.76
• Shares Outstanding: 503,600,000
• 10 Day Avg. Volume: 1,451,655
• 30 Day Avg. Volume: 1,343,469
• PEG Ratio: 3.90
• Price to Book (P/B): 1.24
• Price to Sales (P/S): 2.57
• P/FCF Ratio: -22.13
• Enterprise Value/Market Cap: 1.99
• Enterprise Value/Revenue: 5.89
• Enterprise Value/Gross Profit: 8.13
• Enterprise Value/Ebitda: 12.08
• 1Y Price Target: $69.91
• Price Target Upside: -0.99% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 75 Outperform
• Price Target: C$79.00 ▲(11.88% Upside)

Fortis' strong financial performance and positive earnings call outlook are the most significant factors driving the score. The company's strategic focus on sustainability and capital investments supports long-term growth. However, high leverage and cash flow challenges pose risks. Technical indicators suggest the stock is overbought, which could lead to short-term volatility.

Positive Factors

Dividend Guidance

FTS offers an attractive 4-6% dividend CAGR guidance through 2029.

Financial Stability

Credit ratings from Moody’s and Dominion Bond Rating Service have been reaffirmed, indicating stable financial standing.

Regulatory Environment

The outlook for Fortis' Arizona utilities is improving, with potential for additional generation spending and favorable regulatory reforms.

Negative Factors

Debt and Currency

A stronger USD increases Fortis' reported debt, adding pressure to its leverage ratio target.

Earnings Growth

Fortis is seen to have below-average EPS growth, which is concerning given its current premium valuation.

Valuation Concerns

Fortis is trading at a 10% premium compared to its electric peer group, which is considered high given the current valuation.

Fortis Business Overview & Revenue Model

Company Description

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 438,000 retail customers in southeastern Arizona; and 100,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,485 megawatts (MW), including 53 MW of solar capacity and 252 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 1,065,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 577,000 customers in southern and central Alberta; owns 4 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 143 MW; and on Prince Edward Island with a generating capacity of 130 MW. Additionally, it provides integrated electric utility service to approximately 68,000 customers in Ontario; approximately 272,000 customers in Newfoundland and Labrador; approximately 32,000 customers on Grand Cayman, Cayman Islands; and approximately 16,000 customers on certain islands in Turks and Caicos. The company 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 90,200 circuit Kilometers (km) of distribution lines; and approximately 50,500 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.

How the Company Makes Money

Fortis generates revenue primarily through the sale of electricity and natural gas to its customers. The company operates under a regulated model, which allows it to earn a stable and predictable return on invested capital. Key revenue streams include residential, commercial, and industrial electricity sales, as well as natural gas distribution fees. Additionally, Fortis benefits from rate adjustments approved by regulatory bodies, which can increase revenue based on infrastructure investments and operational costs. The company may also engage in non-regulated activities, such as energy generation from renewable sources, contributing to its earnings. Strategic partnerships with local governments and other utility providers can enhance its service offerings and expand its customer base, further supporting its revenue generation efforts.

Fortis Financial Statement Overview

Summary

Fortis demonstrates strong revenue growth and profitability, supported by robust operational efficiency. The balance sheet is stable with moderate leverage, typical for the industry. While cash flow from operations remains strong, negative free cash flow warrants attention. Overall, Fortis is financially healthy with a focus on maintaining growth and profitability, while managing its debt levels and improving free cash flow.

Income Statement

Fortis has shown consistent revenue growth, with a growth rate of 1.91% in TTM, indicating stable expansion. The gross profit margin is strong at 61.63%, reflecting effective cost management. The net profit margin stands at 14.69%, showing solid profitability. EBIT and EBITDA margins of 28.72% and 47.77%, respectively, highlight robust operational efficiency. Overall, the income statement reflects healthy profitability and steady growth.

Balance Sheet

The company's balance sheet shows a stable equity base with an equity ratio of 32.30%, indicating a moderate level of leverage. The debt-to-equity ratio of 1.43 suggests reliance on debt financing, which is typical for the industry but poses potential risks in a rising interest rate environment. Return on equity is a healthy 7.14%, demonstrating effective use of shareholder funds. Overall, the balance sheet is solid with manageable leverage levels.

Cash Flow

Fortis has experienced a slight decline in free cash flow growth, from -1336 million to -1269 million, indicating improving but still negative free cash flow. The operating cash flow to net income ratio of 2.51 shows strong cash generation relative to income. The negative free cash flow may raise concerns if it continues long-term, but current cash flow coverage of net income is reassuring. Overall, cash flow management is adequate but requires monitoring.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.87B	11.51B	11.52B	11.04B	9.45B	8.94B
Gross Profit	8.59B	8.26B	4.86B	7.09B	6.50B	6.37B
EBITDA	5.78B	5.51B	5.15B	4.50B	4.02B	3.97B
Net Income	1.78B	1.68B	1.57B	1.39B	1.29B	1.27B
Balance Sheet
Total Assets	72.79B	73.49B	65.92B	64.25B	57.66B	55.48B
Cash, Cash Equivalents and Short-Term Investments	221.00M	220.00M	625.00M	209.00M	131.00M	249.00M
Total Debt	33.81B	33.70B	30.03B	29.04B	25.95B	24.86B
Total Liabilities	47.20B	47.63B	42.59B	41.41B	36.74B	35.20B
Stockholders Equity	23.63B	23.81B	21.50B	21.03B	19.29B	18.70B
Cash Flow
Free Cash Flow	-1.71B	-1.34B	-624.00M	-791.00M	-479.00M	-1.34B
Operating Cash Flow	4.32B	3.88B	3.54B	3.07B	2.91B	2.70B
Investing Cash Flow	-6.04B	-5.39B	-3.74B	-4.06B	-3.49B	-4.13B
Financing Cash Flow	1.38B	1.06B	613.00M	1.03B	451.00M	1.33B

Fortis Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 70.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FTS, the sentiment is Positive. The current price of 70.61 is above the 20-day moving average (MA) of 68.27, above the 50-day MA of 65.79, and above the 200-day MA of 62.92, indicating a bullish trend. The MACD of 1.24 indicates Negative momentum. The RSI at 76.32 is Negative, neither overbought nor oversold. The STOCH value of 52.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FTS.

Fortis Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTS	75 Outperform	$35.08B	20.48	7.50%	3.49%	4.22%	6.63%
Sector *	67 Neutral	$17.75B	18.23	5.29%	3.57%	7.33%	12.21%
BEP	―	$16.47B	―	-5.97%	5.89%	―	―
H	76 Outperform	C$30.34B	24.19	10.34%	2.50%	8.03%	11.78%
CPX	68 Neutral	C$9.35B	18.82	10.00%	4.38%	-16.83%	-37.24%
CU	68 Neutral	C$7.82B	23.22	7.52%	4.76%	-0.51%	-17.17%
EMA	―	$14.24B	22.93	7.12%	2.19%	―	―

Fortis Corporate Events

Fortis Inc. Reports Strong Q2 2025 Results and Advances Key Projects

Fortis Inc. reported strong financial results for the second quarter of 2025, with net earnings of $384 million, up from $331 million in the same period of 2024. This growth was driven by rate base growth, favorable exchange rates, and strategic investments such as the Eagle Mountain Pipeline project. The company is on track with its $5.2 billion annual capital plan, having invested $2.9 billion in the first half of 2025. Key projects include the Roadrunner Reserve 1 battery storage system and plans to convert coal-fired generation to natural gas at the Springerville Generating Station. These initiatives are expected to enhance energy reliability and support customer affordability without materially impacting the current five-year capital plan.

The most recent analyst rating on (TSE:FTS) stock is a Hold with a C$59.00 price target. To see the full list of analyst forecasts on Fortis stock, see the TSE:FTS Stock Forecast page.

Fortis Inc. Declares Third Quarter Dividends for 2025

Fortis Inc. has announced its third-quarter dividends for 2025, with payments scheduled for September 1, 2025, to shareholders recorded by August 19, 2025. The declared dividends include various amounts for different series of preference shares and a dividend of $0.615 per share on common shares, all designated as eligible for federal and provincial dividend tax credits. This announcement reflects Fortis’ ongoing commitment to providing shareholder value and maintaining its strong position in the utility industry.

The most recent analyst rating on (TSE:FTS) stock is a Hold with a C$63.00 price target. To see the full list of analyst forecasts on Fortis stock, see the TSE:FTS Stock Forecast page.

Fortis Inc. Announces Preference Share Conversion Results

Fortis Inc. announced the results of its Series H and Series I preference share conversions. A total of 11,298 Series H Shares were converted into Series I Shares, and 248,830 Series I Shares were converted into Series H Shares. Following these conversions, Fortis has 7,902,614 Series H Shares and 2,097,386 Series I Shares outstanding. The Series H Shares will offer a fixed dividend rate of 4.183 percent, while the Series I Shares will provide a floating dividend rate initially set at 4.103 percent, adjusted quarterly. These changes reflect Fortis’s ongoing financial strategies and may impact investor decisions regarding dividend returns.

The most recent analyst rating on (TSE:FTS) stock is a Hold with a C$59.00 price target. To see the full list of analyst forecasts on Fortis stock, see the TSE:FTS Stock Forecast page.