October 17, 2024
Top 10 Stock AltaGas Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: AltaGas – Top 10 Stock in Toronto Stock Exchange Index TSX Composite
AltaGas is listed as a top 10 stock on October 17, 2024 in the market index TSX Composite because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 89 (top 89% performer), Obermatt assesses an overall strong buy recommendation for AltaGas on October 17, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Gas Utilities |
| Index | Low Emissions, TSX Composite |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View AltaGas Strong Buy
| 360 METRICS | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 17 |
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| SENTIMENT | ||||||||
| SENTIMENT | 93 |
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| 360° VIEW | ||||||||
| 360° VIEW | 89 |
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ANALYSIS: With an Obermatt 360° View of 89 (better than 89% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock AltaGas are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for AltaGas. The consolidated Value Rank has an attractive rank of 65, which means that the share price of AltaGas is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 65% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 99, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 93. But the company’s financing is risky with a Safety rank of 17. This means 83% of comparable companies have a safer financing structure than AltaGas. ...read more
RECOMMENDATION: With a consolidated 360° View of 89, AltaGas is better positioned than 89% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 65), above-average growth (Growth Rank of 99), and positive market sentiment in the professional investor community (Sentiment Rank of 93), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 17), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of AltaGas is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for AltaGas very positive
ANALYSIS: With an Obermatt Sentiment Rank of 93 (better than 93% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock AltaGas is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for AltaGas. Analyst Opinions are at a rank of 94 (better than 94% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 92, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 92% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 35, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in AltaGas. There are also only so many institutional investors holding company stock with a Professional Investors rank of 43, which means that, currently, professional investors hold less stock in this company than in 57% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 93 (more positive than 93% compared with investment alternatives), AltaGas has a reputation among professional investors that is significantly higher than that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: AltaGas Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% compared with alternatives), AltaGas shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for AltaGas. Price-to-Sales (P/S) is 88 which means that the stock price compared with what market professionals expect for future sales is lower than for 88% of comparable companies, indicating a good value for AltaGas's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 81. Finally, compared with other companies in the same industry, dividend yields of AltaGas are expected to be higher than for 65% of all competitors (a Dividend Yield rank of 65). The only low rank is for expected profits with a Price-to-Profit Rank of 33, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 65, is a buy recommendation based on AltaGas's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: AltaGas Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% compared with alternatives) for 2024, AltaGas shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for AltaGas. Sales Growth has a value of 60, which means that, currently, professionals expect the company to grow more than 60% of its competitors. The same is valid for Profit Growth with a value of 85 and for Capital Growth with 72. In addition, Stock Returns had an above-average rank value of 99, which means they have been higher than 99% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, AltaGas exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: AltaGas Debt Financing Safety risky
| SAFETY METRICS | October 17, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 24 |
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| REFINANCING | ||||||||
| REFINANCING | 37 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 14 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 17 |
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ANALYSIS: With an Obermatt Safety Rank of 17 (better than 17% compared with alternatives), the company AltaGas has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of AltaGas is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for AltaGas. Liquidity is at 14, meaning that the company generates less profit to service its debt than 86% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 24, meaning the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. Finally, Refinancing is at a rank of 37 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 63% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 17 (worse than 83% compared with alternatives), AltaGas has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: AltaGas Above-Average Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 14 |
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| COMBINED | ||||||||
| COMBINED | 69 |
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ANALYSIS: With an Obermatt Combined Rank of 69 (better than 69% compared with investment alternatives), AltaGas (Gas Utilities, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of AltaGas are a good value (attractively priced) with a consolidated Value Rank of 65 (better than 65% of alternatives), show above-average growth (Growth Rank of 99) but are riskily financed (Safety Rank of 17), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 69, is a buy recommendation based on AltaGas's financial characteristics. As the company AltaGas's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 65) and above-average growth (Obermatt Growth Rank of 99), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 17) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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