Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
45.6% above
-31.3% to fair value
ACCE score
70
out of 100
P/E
50.8x
forward 13.9x
1-year return
+50.3%
Dividend yield
2.57%
ATCO Ltd. in four questions
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Overview
ACCE thesis
ATCO Ltd. is a Calgary-based diversified utility whose holdings include regulated electricity and natural gas distribution in Alberta, a structures and logistics segment that builds modular buildings and provides remote workforce accommodation, and a power generation business. The regulated utility earnings are the anchor, which is why a trailing P/E of 50.3 looks misleading next to a forward P/E of 13.9: reported earnings are depressed by one-off and non-cash items, and the market is pricing the recurring base. Revenue growth of 13.9% and a 22.8% operating margin suggest the structures business is contributing well above what a pure utility would earn, though the 3.4% ROE reflects a heavy equity base and should be checked against the segment mix before drawing conclusions. The case for a closer look rests on the gap between the forward multiple and the trailing one, and on whether the Alberta regulatory and resource-driven demand backdrop continues to support both legs of the business. With an 8.1B CAD market cap and no index membership, the name sits outside much of the passive flow that supports larger Canadian utilities, which may be part of why it trades where it does.
⚠ Investor warnings · 2 flagsAI-assisted·How I use AI
moderate
Stretched trailing multiple
Trailing P/E is 49.6 against a forward P/E of 15.3, and the stock trades 45.6% above the model fair value of C$55.87. Earnings growth of 37.1% is doing a lot of the work.
moderate
Leveraged balance sheet
Debt/Equity of 2.96 is high for a diversified utility, and ROE of 3.4% shows thin returns on that capital base. Limited cushion if rates or earnings move against it.
AI research notes
AI-assisted·How I use AIWritten Oct 18, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Revenue grew 13.9% year over year, well ahead of its 5.5% average annual growth over five years.
Analysts' mean price target of CAD 91.00 sits 14.7% above the current share price.
The forward P/E of 15.3x is below the sector median of 19.5x, so the stock looks cheaper than peers on next-year earnings.
Why it could disappoint
The stock trades 45.6% above the model fair value of C$55.87, and the consensus of models sits 29.6% below the share price.
Return on invested capital is just 0.7% and return on equity 3.4%, so the company earns little on the capital it uses.
Debt to equity of 2.96 is high next to a net margin of 3.4%, leaving little room if rate decisions in Alberta go against the company.
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Next results
Nov 6, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
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Where ACO-X.TO's valuation models land
Price
C$81.36
Model fair value
C$55.87
Model range
C$23.56 to C$94.64
Fair value C$55.87
Price C$81.36
The price sits inside the model range.
Model
Fair value
Upside
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