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Relative valuation derived from Utilities sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 34.5GRADE D
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
30.7%
Sector: 9.9%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Fortis Inc. (FTS) receives a "Buy" rating with a composite score of 50.7/100, ranked #115 out of 4446 stocks. Key factor scores: Quality 35/100, Value 72/100, Momentum 57/100. This is quantitative analysis only — not investment advice.
Fortis Inc. (FTS) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Fortis Inc. Do?
Fortis Inc. operates as an electric and gas utility company in Canada, the United States, and the Caribbean countries. It generates, transmits, and distributes electricity to approximately 438,000 retail customers in southeastern Arizona; and 100,000 retail customers in Arizona's Mohave and Santa Cruz counties with an aggregate capacity of 3,485 megawatts (MW), including 53 MW of solar capacity and 252 MV of wind capacity. The company also sells wholesale electricity to other entities in the western United States; owns gas-fired and hydroelectric generating capacity totaling 65 MW; and distributes natural gas to approximately 1,065,000 residential, commercial, and industrial customers in British Columbia, Canada. In addition, it owns and operates the electricity distribution system that serves approximately 577,000 customers in southern and central Alberta; owns 4 hydroelectric generating facilities with a combined capacity of 225 MW; and provides operation, maintenance, and management services to five hydroelectric generating facilities. Further, the company distributes electricity in the island portion of Newfoundland and Labrador with an installed generating capacity of 143 MW; and on Prince Edward Island with a generating capacity of 130 MW. Additionally, it provides integrated electric utility service to approximately 68,000 customers in Ontario; approximately 272,000 customers in Newfoundland and Labrador; approximately 32,000 customers on Grand Cayman, Cayman Islands; and approximately 16,000 customers on certain islands in Turks and Caicos. The company also holds long-term contracted generation assets in Belize consisting of 3 hydroelectric generating facilities with a combined capacity of 51 MW; and the Aitken Creek natural gas storage facility. It also owns and operates approximately 90,200 circuit Kilometers (km) of distribution lines; and approximately 50,500 km of natural gas pipelines. Fortis Inc. was founded in 1885 and is headquartered in St. John's, Canada. Fortis Inc. (FTS) is classified as a large-cap stock in the Utilities sector. The company is led by CEO David G. Hutchens and employs approximately 9,200 people. With a market capitalization of $28.6B, FTS is one of the prominent companies in the Utilities sector.
Fortis Inc. (FTS) Stock Rating — Buy (April 2026)
As of April 2026, Fortis Inc. receives a Buy rating with a composite score of 50.7/100 and 4 out of 5 stars from the Blank Capital Research quantitative model.FTS ranks #115 out of 4,446 stocks in our coverage universe. Within the Utilities sector, Fortis Inc. ranks #7 of 112 stocks, placing it in the top 10% of its Utilities peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
FTS Stock Price and 52-Week Range
Fortis Inc. (FTS) currently trades at $57.60. The stock gained $0.20 (0.3%) in the most recent trading session. The 52-week high for FTS is $58.78, which means the stock is currently trading -2.0% from its annual peak. The 52-week low is $43.28, putting the stock 33.1% above its annual trough. Recent trading volume was 633K shares, suggesting relatively thin trading activity.
Is FTS Overvalued or Undervalued? — Valuation Analysis
Fortis Inc. (FTS) carries a value factor score of 72/100 in the Blank Capital model, suggesting the stock trades at a meaningful discount to its fundamental earning power. The trailing price-to-earnings ratio is 25.51x, compared to the Utilities sector average of 23.47x — a premium of 9%. The price-to-book ratio stands at 1.76x, versus the sector average of 1.98x. The price-to-sales ratio is 0.91x, compared to 0.82x for the average Utilities stock. On an enterprise value basis, FTS trades at 3.41x EV/EBITDA, versus 4.75x for the sector.
Based on these multiples, Fortis Inc. appears attractively valued relative to both its sector peers and the broader market. Value-oriented investors may find the current entry point compelling, particularly if the company's fundamental quality metrics also score well.
Fortis Inc. Profitability — ROE, Margins, and Quality Score
Fortis Inc. (FTS) earns a quality factor score of 35/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is 30.7%, compared to the Utilities sector average of 9.9%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 10.0% versus the sector average of 3.1%.
On a margin basis, Fortis Inc. reports gross margins of 71.8%, compared to 53.1% for the sector. The operating margin is 28.6% (sector: 21.5%). Net profit margin stands at 15.9%, versus 12.8% for the average Utilities stock. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
FTS Debt, Balance Sheet, and Financial Health
Fortis Inc. has a debt-to-equity ratio of 140.0%, compared to the Utilities sector average of 164.5%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. Total debt on the balance sheet is $23.13B. Cash and equivalents stand at $153M.
FTS has a beta of -0.10, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for Fortis Inc. is 98/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
Fortis Inc. Revenue and Earnings History — Quarterly Trend
In TTM 2026, Fortis Inc. reported revenue of $7.99B and earnings per share (EPS) of $2.25. Net income for the quarter was $1.27B. Gross margin was 71.8%. Operating income came in at $2.29B.
In FY 2024, Fortis Inc. reported revenue of $7.99B and earnings per share (EPS) of $2.25. Net income for the quarter was $1.27B. Gross margin was 71.8%. Revenue grew -8.4% year-over-year compared to FY 2023. Operating income came in at $2.29B.
In FY 2023, Fortis Inc. reported revenue of $8.72B and earnings per share (EPS) of $2.35. Net income for the quarter was $1.30B. Gross margin was 67.3%. Revenue grew 6.9% year-over-year compared to FY 2022. Operating income came in at $2.34B.
In FY 2022, Fortis Inc. reported revenue of $8.16B and earnings per share (EPS) of $2.78. Net income for the quarter was $1.12B. Gross margin was 64.2%. Revenue grew 10.4% year-over-year compared to FY 2021. Operating income came in at $2.02B.
Over the past 8 quarters, Fortis Inc. has demonstrated a growth trajectory, with revenue expanding from $6.15B to $7.99B. Investors analyzing FTS stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
FTS Dividend Yield and Income Analysis
Fortis Inc. (FTS) does not currently pay a dividend. This is common among growth-oriented companies in the Utilities industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Utilities dividend stocks may want to explore other Utilities stocks or use the stock screener to filter by dividend yield.
FTS Momentum and Technical Analysis Profile
Fortis Inc. (FTS) has a momentum factor score of 57/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 51/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 5/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
FTS vs Competitors — Utilities Sector Ranking and Peer Comparison
Comparing FTS against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full FTS vs S&P 500 (SPY) comparison to assess how Fortis Inc. stacks up against the broader market across all factor dimensions.
FTS Next Earnings Date
No upcoming earnings date has been announced for Fortis Inc. (FTS) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy FTS? — Investment Thesis Summary
The bull case for Fortis Inc. rests on several quantitative strengths. The quality score of 35/100 flags below-average profitability. The value score of 72/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 98/100) reduces downside risk.
In summary, Fortis Inc. (FTS) earns a Buy rating with a composite score of 50.7/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on FTS stock.
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Institutional Research Dossier
Fortis Inc. (FTS) Deep Dive Analysis
Published on March 24, 2026
Action RatingBuy
Sections
Executive Summary
We maintain a Hold rating on Fortis Inc. (FTS). The company's regulated utility business provides a stable and predictable revenue stream, supporting a consistent dividend payout, which is attractive in the current market environment. However, the valuation appears stretched relative to its growth prospects and the significant debt burden raises concerns about financial flexibility, limiting potential upside.
Fortis operates in a highly regulated environment, which provides a degree of protection but also constrains its ability to generate outsized returns. While the company's geographic diversification across North America and the Caribbean mitigates some regional risks, the overall growth rate is likely to remain moderate. The current valuation reflects the stability and dividend yield, but does not offer a compelling margin of safety given the debt levels and modest growth outlook.
Business Strategy & Overview
Fortis Inc. operates as a diversified utility company, primarily focused on electricity and gas distribution across Canada, the United States, and the Caribbean. The company's core strategy revolves around regulated utilities, which provide stable and predictable cash flows due to the nature of their monopoly-like positions and regulated rate structures. This allows Fortis to invest in infrastructure upgrades and expansion projects with a reasonable expectation of return on investment.
A key element of Fortis's strategy is its commitment to dividend growth. The company has a long track record of increasing its dividend annually, making it an attractive investment for income-seeking investors. This commitment is supported by the stable cash flows generated from its regulated utility operations. Fortis also focuses on operational efficiency and cost management to improve profitability and maintain its competitive position.
Geographic diversification is another important aspect of Fortis's business strategy. By operating in multiple jurisdictions, the company reduces its exposure to regulatory changes and economic downturns in any single region. This diversification also allows Fortis to pursue growth opportunities in different markets, such as renewable energy projects and infrastructure upgrades.
Fortis's strategic positioning within the utility sector emphasizes long-term stability and predictable growth. The company's focus on regulated utilities, dividend growth, and geographic diversification provides a solid foundation for future performance. However, the company's growth is inherently limited by the regulated nature of its business and the need for significant capital investments.
Execution Benchmarks audit
Gross Margin
Core pricing power
71.8%
Sector: 53.1%
+35% VS SCTR
Economic Moat Analysis
Fortis possesses a narrow economic moat, primarily derived from the regulated nature of its utility operations. The company's electricity and gas distribution businesses operate in territories where competition is limited due to high infrastructure costs and regulatory barriers to entry. This creates a localized monopoly or oligopoly situation, allowing Fortis to earn consistent returns on its investments.
The regulatory environment provides a degree of protection against new entrants and price competition. Regulators typically set rates that allow utilities to recover their costs and earn a reasonable profit, ensuring a stable revenue stream. However, this also limits the potential for outsized profits, as regulators are unlikely to approve excessive rate increases.
While Fortis benefits from the regulated nature of its business, it does not possess a wide economic moat. The company's competitive advantage is primarily based on its existing infrastructure and regulatory approvals, rather than unique technology, brand recognition, or cost advantages. Other utilities operate in similar regulatory environments, limiting Fortis's ability to generate significantly higher returns than its peers.
The company's geographic diversification provides some additional protection, as it reduces its exposure to regulatory changes and economic downturns in any single region. However, this diversification does not create a significant competitive advantage, as other utilities also operate in multiple jurisdictions. Overall, Fortis's narrow economic moat provides a degree of stability and predictability, but it does not guarantee long-term outperformance.
Financial Health & Profitability
Fortis's financial health presents a mixed picture. The company exhibits strong gross and operating margins compared to the sector, with a Gross Margin of 71.8% versus the sector's 53.3% and an Operating Margin of 28.6% versus the sector's 21.7%. This indicates efficient operations and effective cost management. The Net Margin of 15.9% also surpasses the sector average of 12.8%, further highlighting profitability.
However, the company carries a substantial debt load, with a Total Debt of $23.13 billion. The Debt-to-Equity ratio of 140.00 is lower than the sector average of 165.00, which is a positive sign, but the absolute level of debt remains a concern. The company's ability to service this debt depends on its consistent cash flow generation from its regulated utility operations.
Analyzing the quarterly financial history reveals a fluctuating Free Cash Flow (FCF). While FCF was $646.63 million in FY2024, it was significantly lower in previous years, even negative in FY2020 and FY2017. This volatility in FCF raises questions about the company's ability to consistently generate excess cash for debt repayment, dividend payments, and future investments. The FCF generation in FY2023 and FY2022 was particularly weak, raising concerns about the sustainability of the dividend.
Revenue has generally trended upwards over the past decade, from $4.89 billion in FY2015 to $7.99 billion in FY2024, indicating organic growth and successful acquisitions. Net Income has also shown a general upward trend, although with some fluctuations. The ROE of 30.7% is significantly higher than the sector average of 10.0%, suggesting efficient use of equity. However, this high ROE should be viewed in the context of the company's leverage, as debt can inflate ROE.
Valuation Assessment
Fortis's valuation presents a mixed signal. The company's P/E ratio of 24.5x is slightly higher than the sector average of 22.7x, suggesting that the stock is trading at a premium relative to its peers. This premium may be justified by the company's stability and dividend yield, but it also indicates that the stock may be overvalued.
However, the EV/EBITDA ratio of 3.3x is significantly lower than the sector average of 4.8x, suggesting that the company is undervalued on an enterprise value basis. This discrepancy between the P/E and EV/EBITDA ratios may be due to the company's high debt levels, which reduce its enterprise value relative to its market capitalization.
Given the company's moderate growth prospects and high debt levels, the current valuation appears to be fair to slightly overvalued. While the company's stable cash flows and dividend yield are attractive, the valuation does not offer a significant margin of safety. Investors may be paying a premium for the company's stability, but they are also taking on the risk associated with its high debt burden.
A discounted cash flow (DCF) analysis would be necessary to determine a more precise intrinsic value for the stock. However, based on the available data, it appears that the stock is trading near its fair value, with limited upside potential. The market seems to be pricing in the stability and dividend yield, but not fully accounting for the risks associated with the company's debt and moderate growth prospects.
Risk & Uncertainty
A primary risk for Fortis lies in the regulatory environment. Changes in regulations regarding rate structures, environmental standards, or renewable energy mandates could significantly impact the company's profitability and capital expenditure requirements. Unfavorable regulatory decisions could limit the company's ability to recover costs and earn a reasonable return on its investments.
Another significant risk is the company's high debt levels. The company's ability to service its debt depends on its consistent cash flow generation from its regulated utility operations. Economic downturns, unexpected operational disruptions, or unfavorable regulatory changes could negatively impact cash flows and make it difficult for the company to meet its debt obligations. Rising interest rates could also increase the company's borrowing costs and further strain its financial resources.
Competition from other utilities and alternative energy providers also poses a risk. While Fortis operates in regulated territories with limited competition, the emergence of new technologies and business models could disrupt the traditional utility industry. For example, the increasing adoption of distributed generation, such as solar panels and battery storage, could reduce demand for grid-supplied electricity and impact the company's revenue.
Finally, the company faces operational risks associated with its infrastructure and operations. Natural disasters, equipment failures, and cyberattacks could disrupt the company's operations and result in significant costs. The company's ability to effectively manage these risks is crucial to maintaining its financial stability and reputation.
Bulls Say / Bears Say
The Bull Case
BULL VIEWFortis's regulated utility business provides stable and predictable cash flows, supporting a consistent dividend payout and making it an attractive investment in a volatile market.
BULL VIEWThe company's geographic diversification across North America and the Caribbean mitigates regional risks and provides opportunities for growth in different markets.
The Bear Case
BEAR VIEWFortis's high debt levels pose a significant risk to its financial stability and limit its ability to invest in future growth opportunities.
BEAR VIEWThe company's moderate growth prospects and high valuation leave limited upside potential for investors, especially considering the risks associated with its debt and regulatory environment.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score FTS and 4,400+ other equities.
Fortis Inc. exhibits a 5% valuation discount relative to institutional benchmarks. This represents a balanced risk/reward profile based on current multiples.
Return on Assets
Efficiency of asset utilization
10.0%
Sector: 3.1%
Gross Margin
Pricing power and cost efficiency
71.8%
Sector: 53.1%
Operating Margin
Core business profitability
28.6%
Sector: 21.5%
Net Margin
Bottom-line profitability
15.9%
Sector: 12.8%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
