GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » Fortis Inc (TSX:FTS) » Definitions » Interest Coverage

Fortis (TSX:FTS) Interest Coverage : 2.29 (As of Sep. 2024)


View and export this data going back to 1969. Start your Free Trial

What is Fortis Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Fortis's Operating Income for the three months ended in Sep. 2024 was C$814 Mil. Fortis's Interest Expense for the three months ended in Sep. 2024 was C$-355 Mil. Fortis's interest coverage for the quarter that ended in Sep. 2024 was 2.29. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Fortis Inc interest coverage is 2.33, which is low.

The historical rank and industry rank for Fortis's Interest Coverage or its related term are showing as below:

TSX:FTS' s Interest Coverage Range Over the Past 10 Years
Min: 1.87   Med: 2.42   Max: 2.74
Current: 2.33


TSX:FTS's Interest Coverage is ranked worse than
70.71% of 437 companies
in the Utilities - Regulated industry
Industry Median: 3.76 vs TSX:FTS: 2.33

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.


Fortis Interest Coverage Historical Data

The historical data trend for Fortis's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

* Premium members only.

Fortis Interest Coverage Chart

Fortis Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Interest Coverage
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.38 2.41 2.46 2.49 2.36

Fortis Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
Interest Coverage Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.48 2.32 2.61 2.13 2.29

Competitive Comparison of Fortis's Interest Coverage

For the Utilities - Regulated Electric subindustry, Fortis's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Fortis's Interest Coverage Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, Fortis's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Fortis's Interest Coverage falls into.



Fortis Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage=-1* Operating Income /Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt (1).


Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Fortis's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Fortis's Interest Expense was C$-1,305 Mil. Its Operating Income was C$3,084 Mil. And its Long-Term Debt & Capital Lease Obligation was C$27,613 Mil.

Interest Coverage=-1* Operating Income (A: Dec. 2023 )/Interest Expense (A: Dec. 2023 )
=-1*3084/-1305
=2.36

Fortis's Interest Coverage for the quarter that ended in Sep. 2024 is calculated as

Here, for the three months ended in Sep. 2024, Fortis's Interest Expense was C$-355 Mil. Its Operating Income was C$814 Mil. And its Long-Term Debt & Capital Lease Obligation was C$30,055 Mil.

Interest Coverage=-1* Operating Income (Q: Sep. 2024 )/Interest Expense (Q: Sep. 2024 )
=-1*814/-355
=2.29

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

The higher the ratio, the stronger the company's Financial Strength is.


Fortis  (TSX:FTS) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .


Fortis Interest Coverage Related Terms

Thank you for viewing the detailed overview of Fortis's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.


Fortis Business Description

Address
5 Springdale Street, Suite 1100, Fortis Place, Saint John’s, NL, CAN, A1E 0E4
Fortis owns and operates eight utility transmission and distribution subsidiaries in Canada and the United States, serving more than 3.4 million electricity and gas customers. The company has smaller stakes in electricity generation and several Caribbean utilities. Subsidiary ITC operates electric transmission in seven US states, with more than 16,000 miles of high-voltage transmission lines in operation.
Executives
Jocelyn Perry Senior Officer
Keri Linda Glitch Senior Officer
Gary Joseph Smith Director or Senior Officer of Insider or Subsidiary (other than in 4,5,6)
James P. Laurito Director or Senior Officer of Insider or Subsidiary (other than in 4,5,6)
Pierre J. Blouin Director
Tracey Colleen Ball Director
Lawrence Borgard Director
Stuart Lochray Senior Officer
James Reid Senior Officer
Brian Slocum Director or Senior Officer of Insider or Subsidiary (other than in 4,5,6)
Margarita Dilley Director
David Gerard Hutchens Director or Senior Officer of Insider or Subsidiary (other than in 4,5,6)
Donald R. Marchand Director
Julie Dobson Director
Ronald Hinsley Senior Officer