Fortis Inc. (NYSE: FTS)

Sector: Utilities Industry: Utilities - Regulated Electric CIK: 0001666175
Market Cap 28.72 Bn
P/B 1.65
P/E 22.96
P/S 3.23
ROIC (Qtr) 6.95
Div Yield % 0.00
Rev 1y % (Qtr) 9.74
Total Debt (Qtr) 25.28 Bn
Debt/Equity (Qtr) 1.45
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About

Investment thesis

Bull case

  • Operating cash flow of 2.96B provides exceptional 25.07x coverage of minority interest expenses 118.25M, showing strong core operations.
  • Tangible assets of 44.22B provide robust 134.03x coverage of other current liabilities 329.93M, indicating strong asset backing.
  • Retained earnings of 3.63B provide strong 10.99x coverage of other current liabilities 329.93M, indicating earnings quality.
  • Operating cash flow of 2.96B provides strong 6.26x coverage of inventory 473.72M, indicating efficient inventory management.
  • Strong tangible asset base of 44.22B provides 126.47x coverage of acquisition spending 349.64M, enabling strategic growth.

Bear case

  • Operating cash flow of 2.96B barely covers its investment activities of (3.91B), with a coverage ratio of -0.76, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 267.88M provide limited coverage of acquisition spending of 349.64M, which is 0.77x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 1.24B relative to inventory of 473.72M (2.61 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of (1.02B) provides weak coverage of capital expenditures of 3.98B, with a -0.26 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 1.60B show weak coverage of depreciation charges of 1.32B, with a 1.21 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Utilities - Regulated Electric
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NEE Nextera Energy Inc 191.44 Bn 28.01 6.98 95.62 Bn
2 SO Southern Co 97.42 Bn 30.98 4.46 73.75 Bn
3 AEP American Electric Power Co Inc 64.38 Bn 33.83 4.24 0.00 Bn
4 DUK Duke Energy CORP 56.47 Bn 30.61 3.87 89.65 Bn
5 EXC Exelon Corp 48.53 Bn 17.53 2.00 50.08 Bn
6 ETR Entergy Corp /De/ 45.74 Bn 25.29 3.59 30.45 Bn
7 PEG Public Service Enterprise Group Inc 43.93 Bn 35.35 4.41 23.51 Bn
8 XEL Xcel Energy Inc 41.10 Bn 37.21 3.75 35.52 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.72 1.01
EV to Cash from Ops. EV/CFO 13.29 12.45
EV to Debt EV to Debt 1.56 171.92
EV to EBIT EV/EBIT 24.63 19.12
EV to EBITDA EV/EBITDA 10.18 15.67
EV to Free Cash Flow [EV/FCF] EV/FCF -38.64 -28.25
EV to Market Cap EV to Market Cap 1.37 1.84
EV to Revenue EV/Rev 4.44 4.72
Price to Book Value [P/B] P/B 1.65 2.60
Price to Earnings [P/E] P/E 22.96 18.53
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 14.72 1.94
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 62.23
Dividend per Basic Share Div per Share (Qtr) 0.00 2.02
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -218.37
Interest Coverage Interest Coverage 0.00 2.83
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -12.24 -68.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 75.34 73.92
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 4.05
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 12.55 15.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 11.75 13.33
EBIT Growth (1y) % EBIT 1y % (Qtr) 13.72 15.81
EBT Growth (1y) % EBT 1y % (Qtr) 13.72 19.29
EPS Growth (1y) % EPS 1y % (Qtr) 10.30 21.26
FCF Growth (1y) % FCF 1y % (Qtr) -19.38 -35.52
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.76 11.97
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.12 0.22
Cash Payout Ratio Cash Payout Ratio 0.00 0.11
Cash Ratio Cash Ratio (Qtr) 0.05 0.98
Current Ratio Curr Ratio (Qtr) 0.51 2.72
Debt to Equity Ratio Debt/Equity (Qtr) 1.45 1.45
Interest Cover Ratio Interest Cover Ratio 0.00 2.83
Times Interest Earned Times Interest Earned 0.00 2.83
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 32.90 37.94
EBIT Margin % EBIT Margin % (Qtr) 24.68 316.94
EBT Margin % EBT Margin % (Qtr) 18.01 14.36
Gross Margin % Gross Margin % (Qtr) 45.60 41.20
Net Profit Margin % Net Margin % (Qtr) 14.10 12.57