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Reasons to Add TransAlta (TAC) Stock to Your Portfolio Now

TransAlta TAC is a leading power generation and energy solutions company based in Canada. Its focus on clean energy initiatives positions it well in the transition to a low-carbon future.

Let’s focus on the factors that make this Zacks Rank #1 (Strong Buy) stock a strong investment pick at the moment.

Growth Projections

The Zacks Consensus Estimate for 2023 earnings per share is pegged at 98 cents, suggesting a surge of 1325% from the year-ago reported figure. The bottom-line estimates have moved up 50.8% in the past 60 days.

The Zacks Consensus Estimate for current year sales stands at $2.4 billion, indicating year-over-year growth of 5.9%.

Return on Equity (ROE)

ROE is a measure of a company’s financial performance and shows how it is utilizing its funds. TransAlta’s ROE is currently pegged at 9.56%, better than industry’s average of 6.1%, which indicates that the company is utilizing its funds more efficiently than peers.

Free Cash Flow and Dividend

TransAlta is a stable free cash flow generator and utilizes the funds for dividend payments and improving its operation.  The company forecasts 2023 free cash flow in the range of $560 million to $660 million for 2023.

TransAlta has been constantly paying dividends and increasing its shareholders’ value. In the past three years, the company has increased its dividend three times on a year-over-year basis, marking an annual average increase of 8.3%. The current dividend yield of the company is 1.67%.

Price Performance

In the past three months, TAC’s shares have rallied 15.7% compared with the industry’s average growth of 1.1%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Other Stocks to Consider

A few other top-ranked stocks in the same sector are Veolia Environnement VEOEY, NiSource Inc. NI and Avista AVA. Veolia sports a Zacks Rank #1, while NiSource and Avista carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

VEOEY’s long-term (three- to five-year) earnings growth rate is 11.7%. The Zacks Consensus Estimate for 2023 EPS is pegged at $1.81, implying a year-over-year improvement of 206.8%.

NI’s long-term earnings growth rate is 6.9%. The Zacks Consensus Estimate for 2023 EPS is pegged at $1.57, implying a year-over-year improvement of 6.8%.

AVA’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for 2023 EPS is pegged at $2.32, implying a year-over-year improvement of 9.4%.

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NiSource, Inc (NI) : Free Stock Analysis Report

Avista Corporation (AVA) : Free Stock Analysis Report

TransAlta Corporation (TAC) : Free Stock Analysis Report

Veolia Environnement SA (VEOEY) : Free Stock Analysis Report

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Zacks Investment Research