TransAlta Corporation Plans Quarterly Dividend of C$0.07 (NYSE:TAC)

Key Points

• TransAlta declared a quarterly dividend of C$0.07 per share, payable October 1 to shareholders of record September 1. The dividend implies a 2.2% yield, though its current 117.6% payout ratio exceeds earnings coverage.
• Analysts expect improved coverage ahead, forecasting next year’s earnings at C$0.37 per share versus an annual dividend of C$0.20, implying a projected payout ratio of 54.1%.
• TransAlta shares opened at $12.46, down 2.2%, while analyst sentiment remained a consensus “Moderate Buy” with a $23.00 target price.

TransAlta Corporation (NYSE:TAC - Get Free Report) TSE: TA announced a quarterly dividend on Tuesday, July 28th. Stockholders of record on Tuesday, September 1st will be paid a dividend of 0.07 per share by the utilities provider on Thursday, October 1st. This represents a c) annualized dividend and a dividend yield of 2.2%. The ex-dividend date of this dividend is Tuesday, September 1st.

TransAlta has raised its dividend payment by an average of 0.0%annually over the last three years and has increased its dividend annually for the last 2 consecutive years. TransAlta has a dividend payout ratio of 117.6% meaning the company cannot currently cover its dividend with earnings alone and is relying on its balance sheet to cover its dividend payments. Research analysts expect TransAlta to earn $0.37 per share next year, which means the company should continue to be able to cover its $0.20 annual dividend with an expected future payout ratio of 54.1%.

TransAlta Trading Down 2.2%

Shares of TransAlta stock opened at $12.46 on Thursday. The company has a current ratio of 0.76, a quick ratio of 0.70 and a debt-to-equity ratio of 6.61. The company has a fifty day simple moving average of $13.63 and a 200-day simple moving average of $13.18. The stock has a market cap of $3.94 billion, a price-to-earnings ratio of -23.08 and a beta of 0.69. TransAlta has a 12-month low of $11.38 and a 12-month high of $17.88.

TransAlta (NYSE:TAC - Get Free Report) TSE: TA last announced its quarterly earnings results on Wednesday, May 6th. The utilities provider reported $0.04 earnings per share for the quarter, beating analysts' consensus estimates of $0.01 by $0.03. TransAlta had a negative net margin of 9.46% and a positive return on equity of 9.52%. The firm had revenue of $406.19 million during the quarter, compared to analysts' expectations of $436.36 million. On average, equities analysts forecast that TransAlta will post 0.17 EPS for the current fiscal year.

Analyst Upgrades and Downgrades

Several research firms have recently weighed in on TAC. Weiss Ratings raised TransAlta from a "sell (d)" rating to a "sell (d+)" rating in a report on Tuesday, June 16th. Canadian Imperial Bank of Commerce reaffirmed an "outperform" rating on shares of TransAlta in a research report on Friday, July 17th. TD Cowen assumed coverage on TransAlta in a research note on Wednesday, June 10th. They issued a "buy" rating for the company. TD Securities reissued a "buy" rating on shares of TransAlta in a report on Thursday, May 7th. Finally, Zacks Research lowered shares of TransAlta from a "hold" rating to a "strong sell" rating in a research report on Friday, July 17th. One investment analyst has rated the stock with a Strong Buy rating, six have given a Buy rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $23.00.

TransAlta Company Profile

TransAlta Corporation, originally founded in 1909 as Calgary Power Company Ltd., is a publicly traded energy company specializing in the development, ownership and operation of power generation and transmission assets. Headquartered in Calgary, Alberta, TransAlta has grown from its early hydroelectric roots into a diversified energy provider with a multi-fuel generating fleet.

The company's core business activities encompass power generation, asset management and energy trading services.

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