Fortis Inc. (FTS): history, ownership, mission, how it works & makes money

A Brief History of Fortis Inc. (FTS)

Formation and Early Years

Fortis Inc. was established in 1987, originally as a small utility company with a primary focus on electricity generation and distribution in Newfoundland and Labrador. The company was initially named Newfoundland Power Inc. and operated under a single license.

Acquisitions and Growth

Over the years, Fortis has grown significantly through strategic acquisitions. In 2000, Fortis acquired Central Newfoundland Utilities, followed by Maritime Electric in 2004 and FortisAlberta in 2005. By the end of 2022, Fortis owned 10 utilities across Canada and in the United States, serving approximately 3.4 million customers.

Financial Performance

Fortis Inc. reported a revenue of $8.49 billion in 2022, a significant increase from $7.81 billion in 2021. The net earnings were recorded at $1.56 billion in 2022, compared to $1.52 billion in the previous year.

Stock Performance

Fortis Inc. is publicly traded on the Toronto Stock Exchange under the ticker symbol FTS. As of October 2023, the share price was approximately $56.32, with a market capitalization of about $26.58 billion.

Dividends

Fortis has a strong history of increasing dividends. The company declared an annual dividend of $2.22 per share for 2022, with a consistent annual growth rate of approximately 6% over the past decade. The payout ratio is targeted at 60% to 70% of adjusted net earnings.

Sustainability Initiatives

Fortis is committed to sustainability, aiming for a 75% reduction in greenhouse gas emissions by 2035. The company invested approximately $2.3 billion in renewable energy projects between 2020 and 2022, enhancing its portfolio in wind and solar energy.

Future Outlook

Looking ahead, Fortis plans to invest around $20 billion from 2023 to 2027 in infrastructure to enhance its electricity and gas systems, supporting a growing demand for clean energy solutions.

Key Statistics

A Who Owns Fortis Inc. (FTS)

Shareholder Composition

As of 2023, Fortis Inc. (FTS) has a diverse shareholder base comprising individuals, institutional investors, and mutual funds. The following table highlights the major shareholders and their respective ownership percentages:

Insider Ownership

Insider ownership plays a significant role in the governance of Fortis Inc. The latest data shows that insiders own approximately 0.8% of the total shares outstanding. This proportion includes executives and board members who hold shares in the company.

Market Capitalization

Fortis Inc. had a market capitalization of approximately $24.5 billion as of October 2023, reflecting its position as one of the leading utility companies in North America.

Dividends and Financial Performance

Fortis Inc. has a strong record of dividend payments. The company announced a dividend of $0.51 per share for Q3 2023, representing an annualized dividend of $2.04 per share. The dividend payout ratio stands at approximately 67%, showing the company's commitment to returning capital to shareholders.

Recent Stock Performance

As of October 2023, the stock price of Fortis Inc. (FTS) is recorded at approximately $56.75, with a year-to-date return of 8.6% and a trailing twelve-month return of 10.4%.

Analyst Ratings

Analyst recommendations for Fortis Inc. reflect a generally positive outlook. The consensus rating is Buy, with the average price target set at $60.00, indicating a potential upside of 5.8% from the current stock price.

Institutional Holdings Trend

Over the past year, institutional ownership in Fortis Inc. has shown stability and growth. The following table summarizes the trend in institutional holdings:

Risk Factors and Challenges

Fortis Inc. operates in a regulatory environment that presents certain risks. Key challenges include:

• Changes in energy policies
• Infrastructure investment requirements
• Market competition
• Fluctuations in interest rates

Conclusion of Shareholder Landscape

Overall, Fortis Inc. maintains a robust shareholder structure backed by a mix of institutional and individual investors. The company's commitment to dividend growth and financial performance continues to attract interest from the investment community.

Fortis Inc. (FTS) Mission Statement

Overview

Fortis Inc. is a leader in the North American regulated electric and gas utility sector. The company’s mission is to deliver energy to customers in a safe, affordable, and reliable manner, while also focusing on sustainability and community engagement.

Key Components of the Mission Statement

• Safety: Ensuring employee and public safety is paramount.
• Reliability: Commitment to providing reliable service to all customers.
• Affordability: Aiming to maintain reasonable rates.
• Sustainability: Investing in renewable energy resources and reducing greenhouse gas emissions.
• Community Engagement: Supporting the communities in which they operate through various initiatives.

Financial Performance

Fortis reported total revenue of $8.6 billion in 2022. The company's adjusted net income was $1.6 billion, translating into adjusted earnings per share of $2.16.

Operational Highlights

The company serves approximately 3.4 million customers across Canada and the United States through its operations in electric and gas utilities.

Investment in Sustainability

Fortis has made significant commitments to sustainability, targeting a reduction of greenhouse gas emissions by 75% by the year 2035. The company plans to invest $19 billion from 2023 to 2027 in capital projects, with a focus on renewable energy sources.

Employee Commitment

Fortis employs over 9,000 people, with a strong emphasis on safety training and community involvement. The company has invested $15 million in workforce development initiatives in recent years.

Customer Satisfaction

In recent surveys, Fortis achieved a customer satisfaction score of 87%, reflecting the company’s commitment to service quality and customer engagement.

Community Contributions

Fortis Inc. contributes to local communities through charitable donations, totaling over $5 million annually. This includes support for local educational programs and environmental initiatives.

Future Outlook

Fortis aims to enhance its portfolio with an increasing percentage of renewable energy resources, targeting up to 60% of its electricity generation from renewable sources by 2030.

How Fortis Inc. (FTS) Works

Overview of Fortis Inc.

Fortis Inc., a leader in the North American utility sector, primarily focuses on the regulated transmission and distribution of electricity and natural gas. Established in 1885 and headquartered in St. John's, Newfoundland and Labrador, Fortis operates across Canada, the United States, and the Caribbean. As of 2023, Fortis serves approximately 3.4 million customers.

Business Segments

Fortis operates through various subsidiaries, which include:

• Electric Utilities
• Natural Gas Utilities
• Non-Regulated Operations

Financial Performance

For the fiscal year ending December 31, 2022, Fortis reported:

Regulatory Framework

Fortis operates under various regulatory bodies, including:

• Ontario Energy Board (OEB)
• Alberta Utilities Commission (AUC)
• Newfoundland and Labrador Board of Commissioners of Public Utilities

Capital Investments

Fortis is committed to infrastructure growth. The capital investment plan for 2023-2027 is approximately:

Customer Base and Operations

Fortis maintains a diverse customer base, segmented by utility service:

Sustainability Initiatives

Fortis has committed to reducing greenhouse gas emissions by:

• Investing in renewable energy projects
• Enhancing energy efficiency programs
• Aiming for a 75% reduction in emissions by 2035

Recent Developments

In 2023, Fortis announced a significant investment in renewable energy, targeting:

• $1 billion in solar and wind projects
• Expansion of battery storage capabilities
• Collaboration with local governments on sustainable initiatives

Stock Performance

As of October 2023, Fortis Inc. (FTS) stock performance was:

Conclusion

Fortis Inc. has established itself as a formidable player in the utility sector, continuously focusing on growth and sustainability while maintaining strong financial health.

How Fortis Inc. (FTS) Makes Money

Overview of Revenue Streams

Fortis Inc. primarily generates revenue through the distribution of electricity and natural gas. As of the end of 2022, the company served approximately 3.4 million customers across Canada, the United States, and the Caribbean.

Electricity Distribution

Fortis Inc. is heavily involved in electricity distribution. The company operates various subsidiaries which contribute significantly to its revenue. One of the largest, FortisBC, reported a revenue of $1.2 billion for 2022.

• Central Hudson Gas & Electric: $0.3 billion
• Newfoundland Power: $0.6 billion
• FortisAlberta: $1.0 billion

Natural Gas Distribution

The natural gas segment is another critical component of Fortis's business model. The natural gas distribution segment generated approximately $1.0 billion in revenue in 2022. Key subsidiaries include:

• FortisBC Energy: $0.8 billion
• Union Gas: $0.2 billion

Regulated Assets and Rate Base

The company's regulated assets play a crucial role in its revenue generation. As of 2022, Fortis's total consolidated assets were valued at approximately $62 billion. The rate base, which represents the value of the company's assets used to provide utility services, was reported at $29.6 billion.

Capital Expenditures and Growth Strategy

Fortis Inc. has an aggressive capital expenditure plan, expecting to invest over $19 billion from 2023 to 2027. This capital will primarily be directed towards enhancing electric and gas distribution infrastructure, with expected annual growth rates in earnings per share around 6%.

Revenue from Renewable Energy Initiatives

Fortis has been increasing its investments in renewable energy. By 2022, the company’s renewable energy generation capacity reached approximately 2,000 MW, contributing about 15% to its overall energy portfolio.

Recent Financial Performance

For the fiscal year ending December 31, 2022, Fortis Inc. reported:

Customer Base and Market Penetration

Fortis operates in three countries, which enhances its market penetration. The customer distribution is as follows:

Regulatory Environment

Fortis operates in a heavily regulated environment, which includes rate reviews and regulatory approvals. The average return on equity (ROE) in regulated operations stands at around 8-10%, which is crucial for maintaining financial stability.

Conclusion

Fortis Inc. continues to leverage its diverse revenue streams and strategic investments to ensure sustained financial growth and resilience in the utility sector.