Fortis (FTS) AI Stock Analysis

• Market Cap: $34.01B
• Dividend Yield: 3.59%
• Average Volume (3M): 1.09M
• Price to Earnings (P/E): 20.5
• Beta (1Y): 0.33
• Revenue Growth: 3.64%
• EPS Growth: 5.82%
• Country: CA
• Employees: 9,800
• Sector: Utilities
• Sector Strength: 80
• Industry: Regulated Electric
• EPS (TTM): 0.76
• Shares Outstanding: 501,600,000
• 10 Day Avg. Volume: 1,376,364
• 30 Day Avg. Volume: 1,088,704
• PEG Ratio: 8.72
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -25.55
• 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: $69.05
• Price Target Upside: 1.85% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 78 Outperform
• Price Target: C$77.00 ▲(13.57%Upside)

Fortis' stock is supported by strong earnings growth and a commitment to capital investments and dividend increases. The technical analysis shows positive momentum, though caution is advised due to overbought signals. While the valuation is fair, the earnings call and corporate events highlight a strategic focus on growth and shareholder value, contributing to a positive outlook. Challenges such as negative free cash flow and potential tariff impacts remain but are mitigated by the company's financial health and strategic initiatives.

Positive Factors

Earnings potential

The bull case argues that Fortis can unlock earnings upside through constructive Arizona regulation.

Financial stability

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

Growth outlook

The potential for significant growth in Arizona with new high retail load growth and renewables investments.

Negative Factors

EPS growth challenges

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

Regulatory risks

The appointment of Mark Christie as FERC Chairman introduces a risk for transmission ratemaking, impacting Fortis' risk profile.

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. (FTS) is a leading North American utility company headquartered in St. John's, Newfoundland and Labrador, Canada. The company operates in the electric and gas utility sectors, providing regulated utility services to approximately 3.4 million customers across Canada, the United States, and the Caribbean. Fortis focuses on delivering safe, reliable, and cost-effective energy to its customers while investing in sustainable energy solutions and infrastructure improvements.

How the Company Makes Money

Fortis makes money primarily through its regulated utility operations. The company's revenue model is based on providing electric and gas services to residential, commercial, and industrial customers. As a regulated utility, Fortis earns revenue through rates that are approved by regulatory bodies, ensuring stable and predictable cash flows. These rates are designed to allow the company to recover its costs and earn a reasonable return on its investments. Fortis also benefits from its diversified operations across multiple jurisdictions, which helps mitigate risks associated with regulatory changes or economic downturns in any single market. Additionally, the company invests in renewable energy projects and infrastructure development, which contribute to its earnings growth. Significant partnerships and investments in clean energy initiatives also play a role in enhancing Fortis's revenue streams.

Fortis Financial Statement Overview

Summary

Fortis demonstrates strong revenue growth and profitability, with robust operational efficiency. The balance sheet is stable, albeit with moderate leverage typical for the industry. Cash flow from operations is strong, but negative free cash flow requires monitoring. Overall, Fortis is financially healthy, focusing on maintaining growth and profitability while managing debt levels.

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	11.73B	11.51B	11.52B	11.04B	9.45B	8.94B
Gross Profit	7.23B	8.26B	4.86B	7.09B	6.50B	6.37B
EBITDA	5.60B	5.51B	5.15B	4.50B	4.02B	3.97B
Net Income	1.72B	1.68B	1.57B	1.39B	1.29B	1.27B
Balance Sheet
Total Assets	74.72B	73.49B	65.92B	64.25B	57.66B	55.48B
Cash, Cash Equivalents and Short-Term Investments	510.00M	220.00M	625.00M	209.00M	131.00M	249.00M
Total Debt	34.41B	33.70B	30.03B	29.04B	25.95B	24.86B
Total Liabilities	48.52B	47.63B	42.59B	41.41B	36.74B	35.20B
Stockholders Equity	24.14B	23.81B	21.50B	21.03B	19.29B	18.70B
Cash Flow
Free Cash Flow	-1.27B	-1.34B	-624.00M	-791.00M	-479.00M	-1.34B
Operating Cash Flow	4.33B	3.88B	3.54B	3.07B	2.91B	2.70B
Investing Cash Flow	-5.68B	-5.39B	-3.74B	-4.06B	-3.49B	-4.13B
Financing Cash Flow	1.26B	1.06B	613.00M	1.03B	451.00M	1.33B

Fortis Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 67.80
• 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:FTS, the sentiment is Positive. The current price of 67.8 is above the 20-day moving average (MA) of 65.55, above the 50-day MA of 65.43, and above the 200-day MA of 62.80, indicating a bullish trend. The MACD of 0.71 indicates Negative momentum. The RSI at 67.81 is Neutral, neither overbought nor oversold. The STOCH value of 89.00 is Negative, 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	78 Outperform	$34.01B	20.50	7.46%	3.59%	3.64%	5.82%
EMA	76 Outperform	$19.38B	22.10	7.12%	5.63%	8.17%	31.60%
CU	72 Outperform	C$7.92B	23.50	7.52%	4.70%	-0.51%	-17.17%
H	70 Outperform	C$29.39B	24.10	10.15%	2.60%	9.95%	11.34%
CPX	69 Neutral	C$9.01B	18.17	10.00%	4.49%	-16.83%	-37.24%
Sector *	67 Neutral	$17.54B	18.00	7.11%	3.56%	4.38%	9.89%
BEP.UN	55 Neutral	$25.29B	―	-5.97%	5.29%	22.01%	-183.73%

Fortis Corporate Events

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.