Reviewing Fortis (FTS) and The Competition

Fortis (NYSE: FTS) is one of 69 publicly-traded companies in the “Electric services” industry, but how does it contrast to its competitors? We will compare Fortis to related companies based on the strength of its analyst recommendations, valuation, earnings, dividends, profitability, institutional ownership and risk.

Profitability

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This table compares Fortis and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fortis 11.58% 6.86% 2.21%
Fortis Competitors -23.03% 4.40% -0.42%

Dividends

Fortis pays an annual dividend of $1.36 per share and has a dividend yield of 4.0%. Fortis pays out 69.7% of its earnings in the form of a dividend. As a group, “Electric services” companies pay a dividend yield of 3.8% and pay out 70.7% of their earnings in the form of a dividend. Fortis is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Fortis and its competitors gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Fortis $6.40 billion $792.99 million 17.52
Fortis Competitors $8.48 billion $470.03 million 10.85

Fortis’ competitors have higher revenue, but lower earnings than Fortis. Fortis is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Volatility and Risk

Fortis has a beta of -0.23, meaning that its stock price is 123% less volatile than the S&P 500. Comparatively, Fortis’ competitors have a beta of 0.03, meaning that their average stock price is 97% less volatile than the S&P 500.

Institutional and Insider Ownership

51.3% of Fortis shares are owned by institutional investors. Comparatively, 63.6% of shares of all “Electric services” companies are owned by institutional investors. 3.5% of shares of all “Electric services” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Fortis and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fortis 0 1 3 0 2.75
Fortis Competitors 426 2330 2019 57 2.35

Fortis presently has a consensus target price of $51.00, suggesting a potential upside of 49.30%. As a group, “Electric services” companies have a potential upside of 7.93%. Given Fortis’ stronger consensus rating and higher possible upside, equities analysts plainly believe Fortis is more favorable than its competitors.

Summary

Fortis beats its competitors on 10 of the 15 factors compared.

Fortis Company Profile

Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean. It generates, transmits, and distributes electricity to approximately 422,000 retail customers in southeastern Arizona; and 96,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 2,834 megawatts (MW), including 64 MW of solar capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 64 MW; and distributes natural gas to approximately 1,008,000 customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 556,000 customers in southern and central Alberta; owns four hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador serving approximately 266,000 customers with an installed generating capacity of 139 MW; and on Prince Edward Island serving approximately 80,000 customers through generating facilities with a combined capacity of 145 MW. Additionally, it provides integrated electric utility service to approximately 66,000 customers in Ontario; approximately 44,000 customers on Grand Cayman, Cayman Islands; and approximately 15,000 customers on certain islands in Turks and Caicos, as well as holds long-term contracted generation assets in British Columbia and Belize, and the Aitken Creek natural gas storage facility. It also owns and operates transmission and distribution lines; and natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada.

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