Fortis (FTS) AI Stock Analysis

• Market Cap: $35.72B
• Dividend Yield: 3.52%
• Average Volume (3M): 2.03M
• Price to Earnings (P/E): 21.0
• Beta (1Y): 0.13
• Revenue Growth: 5.21%
• EPS Growth: 4.27%
• Country: CA
• Employees: 9,800
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.87
• Shares Outstanding: 505,400,000
• 10 Day Avg. Volume: 2,115,953
• 30 Day Avg. Volume: 2,034,948
• 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: 2.05
• Enterprise Value/Revenue: 6.54
• Enterprise Value/Gross Profit: 15.38
• Enterprise Value/Ebitda: 13.96
• 1Y Price Target: $72.78
• Price Target Upside: 2.97% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): 3.47
• Revenue Forecast (FY): $12.65B

• Rating: 61 Neutral
• Price Target: C$75.00 ▲(6.11% Upside)

Fortis' overall score is driven by solid financial performance and a positive earnings call outlook, tempered by technical analysis indicating bearish momentum. The valuation is reasonable, but not enough to significantly boost the score. The company's strategic investments and dividend growth are positive, but cash flow challenges and regulatory issues present risks.

Positive Factors

Capital Investment Plan

The expanded capital investment plan indicates Fortis' commitment to infrastructure growth, enhancing its long-term competitive position and capacity to serve more customers.

Dividend Growth

Consistent dividend growth over decades reflects Fortis' stable cash flow generation and shareholder value commitment, appealing to income-focused investors.

Balance Sheet Strength

Asset sales have bolstered Fortis' financial position, providing flexibility for future investments and reducing leverage, which is crucial for long-term stability.

Negative Factors

Regulatory Lag

Regulatory lag can delay revenue realization from investments, impacting cash flow and potentially hindering future growth initiatives.

Higher Finance Costs

Increased finance costs can erode profit margins and reduce available capital for reinvestment, affecting long-term profitability and growth potential.

Negative Free Cash Flow

Negative free cash flow suggests liquidity challenges, limiting Fortis' ability to fund new projects without external financing, which could impact growth.

Fortis Business Overview & Revenue Model

Company Description

Fortis Inc. is a North American leader in the regulated electric and gas utility sector, headquartered in St. John's, Newfoundland and Labrador, Canada. The company operates through a diverse portfolio of utility operations across Canada, the United States, and the Caribbean, providing electricity and natural gas to over 3 million customers. Fortis is primarily involved in the transmission and distribution of electricity, as well as the distribution of natural gas, with a focus on sustainable energy solutions and infrastructure investment.

How the Company Makes Money

Fortis generates revenue primarily through the provision of regulated utility services, which include the transmission and distribution of electricity and natural gas. The company's revenue model is largely based on a cost-of-service approach, where it earns a regulated return on invested capital. Key revenue streams include residential, commercial, and industrial electricity sales, as well as natural gas distribution services. Fortis also benefits from long-term contracts and regulatory frameworks that ensure stable cash flows. Additionally, the company invests in infrastructure upgrades and renewable energy projects, which can enhance its revenue potential over time. Strategic partnerships with local governments and other utility providers further contribute to its earnings, enabling Fortis to expand its service offerings and improve operational efficiencies.

Fortis Financial Statement Overview

Summary

Fortis demonstrates solid profitability with stable margins and a manageable debt-to-equity ratio. However, challenges in revenue growth and negative free cash flow pose concerns for long-term financial health.

Income Statement

Fortis shows strong profitability with a consistent EBIT margin around 29% and a net profit margin of approximately 15% in TTM. However, the revenue growth rate has declined by 5.57% in the TTM, indicating potential challenges in revenue generation. The gross profit margin remains stable, reflecting efficient cost management.

Balance Sheet

The company maintains a stable debt-to-equity ratio of 1.43 in TTM, which is manageable for the industry. Return on equity is modest at 7.56%, suggesting reasonable profitability relative to shareholder equity. The equity ratio stands at 32.5%, indicating a balanced capital structure.

Cash Flow

Operating cash flow is positive, covering 70% of net income, but free cash flow remains negative, posing a concern for liquidity. The free cash flow to net income ratio is negative, highlighting cash flow challenges despite profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.21B	11.51B	11.52B	11.04B	9.45B	8.94B
Gross Profit	4.77B	5.22B	4.86B	4.41B	3.97B	3.94B
EBITDA	5.25B	5.29B	4.92B	4.50B	4.02B	3.97B
Net Income	1.65B	1.68B	1.57B	1.39B	1.29B	1.27B
Balance Sheet
Total Assets	74.50B	75.06B	67.41B	65.87B	59.01B	56.77B
Cash, Cash Equivalents and Short-Term Investments	389.00M	220.00M	625.00M	209.00M	131.00M	249.00M
Total Debt	34.42B	33.70B	30.03B	29.04B	25.95B	24.86B
Total Liabilities	48.25B	49.21B	44.08B	43.03B	38.10B	36.49B
Stockholders Equity	24.20B	23.81B	21.50B	21.03B	19.29B	18.70B
Cash Flow
Free Cash Flow	-2.14B	-1.34B	-624.00M	-791.00M	-479.00M	-1.34B
Operating Cash Flow	4.01B	3.88B	3.54B	3.07B	2.91B	2.70B
Investing Cash Flow	-5.81B	-5.39B	-3.74B	-4.06B	-3.49B	-4.13B
Financing Cash Flow	1.28B	1.06B	613.00M	1.03B	451.00M	1.33B

Fortis Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 70.68
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FTS, the sentiment is Neutral. The current price of 70.68 is below the 20-day moving average (MA) of 72.65, below the 50-day MA of 71.73, and above the 200-day MA of 67.07, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 36.14 is Neutral, neither overbought nor oversold. The STOCH value of 6.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:FTS.

Fortis Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
H	74 Outperform	C$30.98B	24.70	10.58%	2.44%	5.98%	14.79%
EMA	69 Neutral	$19.74B	17.79	8.83%	4.43%	14.10%	65.76%
CU	67 Neutral	C$10.72B	24.01	8.84%	4.39%	-0.94%	25.64%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CPX	65 Neutral	C$10.87B	24.81	9.40%	4.24%	-2.99%	-32.11%
FTS	61 Neutral	$35.72B	21.00	7.42%	3.52%	5.21%	4.27%
BEP.UN	56 Neutral	$26.55B	―	-5.58%	5.29%	14.78%	-9.37%

Fortis Corporate Events

Fortis Inc. Declares First Quarter Dividends for 2026

Fortis Inc. announced its first-quarter dividends for 2026, with payments scheduled for March 1, 2026, to shareholders of record as of February 17, 2026. The declared dividends include various amounts for different series of preference shares and $0.64 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 sector.