Fortis Inc
🇨🇦 FTS.TO · Toronto · CA3495531079
Utilities
CAD 79.02 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
22.1
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 79.02 ÷ 3.57 = 22.1
TTM period through: 2025-12-31
Forward P/E (estimated): 21.7
Based on analyst estimates
Reference: Provider P/E (Trailing): 23.2
Yield (Fwd)
3.21%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 3.18%
Net Debt/EBITDA (TTM)
5.8x
Latest quarter: 21.4x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 21.4x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
71.1%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 48.5%
Cash Flow Payout (TTM): 21.5%
FCF Coverage (TTM): -2.49x
ROE
7.6%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
12.9x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Fortis is a high-quality North American regulated utility offering exceptional earnings visibility and a legendary dividend growth history. While the business model remains highly defensive and existing shareholders should maintain positions to collect the reliable 3.2% yield, current valuation levels offer limited upside for new capital. New investors should wait for a market pullback to provide a better entry point below fair value.
Sector Context
Fortis Inc is a premier North American utility that generates, transmits, and distributes electricity and natural gas to millions of customers. As a highly regulated utility, the company operates as a regional monopoly, allowing it to generate extremely predictable, recession-resistant cash flows. Utilities are capital-intensive businesses where negative free cash flow and higher debt levels are standard operating procedures, justified by guaranteed regulatory returns.
📊 Strategy Analysis
- • Operates as a highly resilient, regulated electric and gas utility with strong natural monopoly characteristics across North America.
- • Boasts an exceptional track record of dividend reliability, supported by a massive $28.8 billion capital investment plan driving predictable rate-base growth.
- • Stable historical fundamentals with long-term revenue and EPS growth hovering around 5.5% CAGR, providing excellent business visibility.
⚠ What to Watch
- • Current valuation is elevated with a TTM P/E of 22.1x, well above the ideal 8-15x target range for value-oriented dividend investors.
- • The current stock price of 79.02 CAD significantly exceeds the calculated monopoly fair value upper bound of 71.43 CAD, leaving virtually no margin of safety.
- • Ongoing negative free cash flow (-676M CAD) and elevated Net Debt/EBITDA (5.83x) require continuous access to capital markets, which carries risk in a 'higher for longer' interest rate environment.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.