Fortis FTS
Fortis Inc. is a Canadian utility company that operates regulated electricity and gas transmission and distribution networks in Canada, the US, and the Caribbean, with a business model based on stable and predictable revenues subject to tariff regulation. Fortis presents acceptable financial health (5.95) but with very high leverage (Net Debt/EBITDA of 6.31) and negative free cash flow conversion (-47.69), making it vulnerable to rising interest rates. Its valuation (P/E 22.12) is not particularly attractive for a utility with moderate growth, although the dividend (3.48% net) offers an interesting support.
Detailed metrics
Market and fundamental data as of the analysis date.
Full AI report
Generated automatically from the metrics, the macro context and the company's news.
Fortis Inc. is a Canadian utility company that operates regulated electricity and gas transmission and distribution networks in Canada, the US, and the Caribbean, with a business model based on stable and predictable revenues subject to tariff regulation. Fortis presents acceptable financial health (5.95) but with very high leverage (Net Debt/EBITDA of 6.31) and negative free cash flow conversion (-47.69), making it vulnerable to rising interest rates. Its valuation (P/E 22.12) is not particularly attractive for a utility with moderate growth, although the dividend (3.48% net) offers an interesting support.
Score by category
| Category | Score |
|---|---|
| Financial health | 5.4 |
| Quality / Moat | 3.5 |
| Valuation | 4.2 |
| Growth | 5.2 |
| Dividend | 6.8 |
| Momentum | 6.2 |
| Risk & Context | 8.3 |
OVERALL SCORE: 5.7/10
Context and risks
The sharp rise in 10-year Treasury yields (5.17%) is a material headwind for Fortis, a regulated utility with a Net Debt/EBITDA of 6.31, highly leveraged and with long-duration cash flows. The increase in financing costs pressures its financial health and the present value of its future cash flows, a risk that the quantitative engine already partially reflects in the health (5.95) and valuation (4.57) scores.
News considered in the analysis
- Fortis (FTS) Q2 2026 Earnings Call Transcript — La llamada de resultados del Q2 2026 destaca el crecimiento del EPS y la expansión estratégica, lo que refuerza la confianza en el plan de crecimiento quinquenal de la empresa.
- Fortis (TSX:FTS) Stock Looks Cheap With A Mixed Valuation Read — Artículo de opinión con una lectura mixta de valoración; no aporta información nueva y concreta sobre la empresa.
- Fortis (TSX:FTS) Could Be 70% Below Fair Value After Q2 Results — Análisis de valoración que sugiere un potencial alcista significativo; es una opinión de un portal, no un hecho confirmado, por lo que se le asigna una probabilidad moderada.
- Fortis Inc (FTS) (Q2 2026) Earnings Call Highlights: EPS Growth and Strategic Expansion Drive ... — Los resultados del Q2 2026 muestran un crecimiento del EPS y una expansión estratégica, en línea con las expectativas del mercado.
- Fortis Q2 Earnings Call Highlights — Resumen de los resultados del Q2 2026, que confirman la solidez operativa y el avance del plan de inversión.
Verdict: Hold; high debt and sensitivity to interest rates limit the appeal despite the stable dividend.
Main risk: The main risk is the high leverage (Net Debt/EBITDA of 6.31) combined with rising interest rates, which makes refinancing its debt more expensive and pressures its financial health and valuation.
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