Atlantic Power Corp (AT): Nice Assets

To infinity and beyond!
Book value and cash may be good of indicators of value today, but share prices are also a result of expected earnings. For a rough-and-tumble look at each utilities’ earnings expectations, let’s examine each utility’s forward price-to-earnings ratio. This measure compares a company’s current share price to expected EPS. While utilities’ year-to-year earnings are never a perfect indicator of future growth, it gives us an idea of what investors might expect in the coming quarters.

AT Forward P/E Ratio data by YCharts

TECO Energy, Inc. (NYSE:TE)’s priciness plays out once again, while Atlantic Power Corp (NYSE:AT)’s negative earnings expectations literally push its ratio off the charts. Exelon Corporation (NYSE:EXC) got the cheapest future earnings around, followed close above by FirstEnergy Corp. (NYSE:FE). Ameren Corp (NYSE:AEE) sticks to middle ground with a 17.1 forward P/E ratio, but it was trading at FirstEnergy Corp. (NYSE:FE)’s levels as recently as January.

Time to buy Atlantic?
In part one, Atlantic’s fundamentals looked lackluster, at best. In part two, we find that Atlantic’s share prices are dirt cheap, even with negative cash flow and earnings expectations. Be sure to check back for part three, where I’ll discuss the most important aspect yet – Atlantic’s business model. Regardless of where it’s been or how it’s priced, a business can only be successful if it’s got the structure and strategy to push its profits forward.

Atlantic Power Corp (NYSE:AT) stock is not your usual dividend dynamite. It’s a risky investment with the potential for big rewards – or big losses. But there’s one utility out there offering safe growth at a fair price.

The article Is It Time to Buy Atlantic Stock? Part Two originally appeared on Fool.com is written by Justin Loiseau.

Motley Fool contributor Justin Loiseau has no position in any stocks mentioned, but he does use electricity. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.The Motley Fool recommends Exelon.

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