Critical Analysis: TransAlta Renewables (TRSWF) & Its Peers

Dividends

TransAlta Renewables pays an annual dividend of $0.83 per share and has a dividend yield of 9.0%. TransAlta Renewables pays out 223.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Independent Power & Renewable Electricity Producers” companies pay a dividend yield of 6.6% and pay out 483.0% of their earnings in the form of a dividend. TransAlta Renewables is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Profitability

This table compares TransAlta Renewables and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TransAlta Renewables	N/A	N/A	N/A
TransAlta Renewables Competitors	-42.77%	13.97%	0.82%

Earnings and Valuation

This table compares TransAlta Renewables and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
TransAlta Renewables	N/A	N/A	24.68
TransAlta Renewables Competitors	$6.34 billion	$832.84 million	-2.18

TransAlta Renewables’ rivals have higher revenue and earnings than TransAlta Renewables. TransAlta Renewables is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Insider & Institutional Ownership

75.9% of TransAlta Renewables shares are owned by institutional investors. Comparatively, 35.4% of shares of all “Independent Power & Renewable Electricity Producers” companies are owned by institutional investors. 21.7% of shares of all “Independent Power & Renewable Electricity Producers” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

TransAlta Renewables beats its rivals on 5 of the 9 factors compared.

TransAlta Renewables Company Profile

TransAlta Renewables Inc. owns, develops, and operates renewable and natural gas power generation facilities and other infrastructure assets in Canada, the United States, and Australia. The company operates through Canadian Wind, Canadian Hydro, Canadian Gas, US Wind and Solar, US Gas, and Australian Gas segments. Its portfolio of assets comprises 50 renewable power generation facilities, including wind, hydro, and gas. The company was incorporated in 2013 and is headquartered in Calgary, Canada. TransAlta Renewables Inc. operates as a subsidiary of TransAlta Corporation.