I've been keeping an eye on TransAlta Renewables Inc. (TSE:RNW) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe RNW has a lot to offer. Basically, it is a company with great financial health as well as a an impressive track record of performance. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on TransAlta Renewables here.
Proven track record with adequate balance sheet
Over the past few years, RNW has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. Not only did RNW outperformed its past performance, its growth also exceeded the Renewable Energy industry expansion, which generated a 34% earnings growth. This is what investors like to see! RNW's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. RNW's has produced operating cash levels of 0.39x total debt over the past year, which implies that RNW's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For TransAlta Renewables, there are three relevant factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for RNW’s future growth? Take a look at our free research report of analyst consensus for RNW’s outlook.
- Valuation: What is RNW worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether RNW is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RNW? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.