November 23, 2023
Top 10 Stock Fortis 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: Fortis – Top 10 Stock in Energy Efficency Leaders
Fortis is listed as a top 10 stock on November 23, 2023 in the market index Energy Efficient 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 from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 94 (top 94% performer), Obermatt assesses an overall strong buy recommendation for Fortis on November 23, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Electric Utilities |
| Index | Low Emissions, Energy Efficient, Renewables Users, 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 Fortis Strong Buy
| 360 METRICS | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 78 |
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| SENTIMENT | ||||||||
| SENTIMENT | 48 |
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| 360° VIEW | ||||||||
| 360° VIEW | 94 |
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ANALYSIS: With an Obermatt 360° View of 94 (better than 94% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Fortis are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Fortis. The consolidated Value Rank has an attractive rank of 54, which means that the share price of Fortis 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 54% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 97, 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. The company is also safely financed with a Safety Rank of 78. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 48. Professional investors are more confident in 52% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 94, Fortis is better positioned than 94% 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 54), above-average growth (Growth Rank of 97), and safe financing practices (Safety Rank of 78), 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 professional market sentiment is on the riskier side (Sentiment Rank of 48), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Fortis is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Fortis only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 48 (better than 48% compared with alternatives), overall professional sentiment and engagement for the stock Fortis is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Fortis. Analyst Opinions are at a rank of 13 (worse than 87% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 43, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 82, which means that professional investors hold more stock in this company than in 82% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 65, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 65% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Fortis and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 48 (less encouraging than 52% compared with investment alternatives), Fortis has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Fortis Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 54 (better than 54% compared with alternatives), Fortis shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Fortis. Expected dividend yields are higher than for 52% of comparable companies (a Dividend Yield rank of 52), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 82, which means that the stock price is lower compared with invested capital than for 82% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 35 which means that the stock price compared with what market professionals expect for future profits is higher than for 65% of comparable companies, indicating a low value concerning Fortis's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Fortis with a rank of 35. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 65% of comparable companies, indicating a low value concerning Fortis's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 54, is a buy recommendation based on Fortis's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Fortis may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Fortis Growth Momentum high
| GROWTH METRICS | November 23, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 62 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 86 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 57 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 93 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 97 |
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ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2023, Fortis 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 Fortis. Sales Growth has a value of 62, which means that, currently, professionals expect the company to grow more than 62% of its competitors. The same is valid for Profit Growth with a value of 86 and for Capital Growth with 57. In addition, Stock Returns had an above-average rank value of 93, which means they have been higher than 93% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Fortis 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: Fortis Debt Financing Safety very solid
| SAFETY METRICS | November 23, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 67 |
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| REFINANCING | ||||||||
| REFINANCING | 34 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 78 |
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ANALYSIS: With an Obermatt Safety Rank of 78 (better than 78% compared with alternatives) for 2023, the company Fortis has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Fortis is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Fortis. Leverage is at a rank of 67, meaning the company has a below-average debt-to-equity ratio. It has less debt than 67% of its competitors. Liquidity is also good at a rank of 100, meaning the company generates more profit to service its debt than 100% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 34, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 66% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 78 (better than 78% compared with alternatives), Fortis has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Fortis. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Fortis Top Financial Performance
| COMBINED PERFORMANCE | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| COMBINED | ||||||||
| COMBINED | 100 |
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ANALYSIS: With an Obermatt Combined Rank of 100 (better than 100% compared with investment alternatives), Fortis (Electric Utilities, Canada) shares have much better financial characteristics than comparable stocks. Shares of Fortis are a good value (attractively priced) with a consolidated Value Rank of 54 (better than 54% of alternatives), show above-average growth (Growth Rank of 97), and are safely financed (Safety Rank of 78), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 100, is a strong buy recommendation based on Fortis's financial characteristics. As the company Fortis's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 54), above-average growth (Obermatt Growth Rank of 97), and indicate that the company is safely financed (Obermatt Safety Rank of 78), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Fortis. 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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