Operating Margin - Atco Ltd (TSX:ACO.X)

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Price: 54.47 CAD 2.08%

Market Cap: 6.1B CAD

24.6%

Current

24%

Average

13.8%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

24.6%

Operating Profit

1.3B

Revenue

5.1B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
CA		Atco Ltd TSX:ACO.X	6.1B CAD	25%
UK		National Grid PLC LSE:NG	55.9B GBP	30%
FR		Engie SA PAR:ENGI	52.8B EUR	14%
US		Sempra Energy NYSE:SRE	57.8B USD	23%
US	S	Sempra VSE:SREN	43.4B EUR	23%
US		Dominion Energy Inc NYSE:D	51.1B USD	29%
DE		E.ON SE XETRA:EOAN	40.1B EUR	7%
US		Public Service Enterprise Group Inc NYSE:PEG	40.2B USD	25%
DE		RWE AG XETRA:RWE	31.7B EUR	10%
DE		E ON SE MIL:EOAN	31.3B EUR	2%
US		Consolidated Edison Inc NYSE:ED	35.9B USD	18%

Atco Ltd
Glance View

Market Cap

6.1B CAD

Industry

Utilities

Atco Ltd., an intriguing player in the infrastructure space, emerged from humble beginnings as a trailer rental business in the Canadian city of Calgary during the 1940s. Over the decades, it deftly transformed itself into a diversified global enterprise, adeptly seizing opportunities across a range of industries. Today, Atco's operations are segmented into structures and logistics, utilities, energy infrastructure, retail energy, and property services, allowing it a balanced mix of revenue streams. This diversity is not just a defensive posture but a strategic advancement that enables the company to thrive through economic gyrations. By maintaining a finger on the pulse of essential services like electricity and natural gas, while exploring innovative technologies, Atco not only sustains its financial robustness but propels forward its ambitious sustainability goals. The mechanisms of Atco's money-making engine are as diverse as its portfolio. Its structures and logistics segment thrives on crafting modular solutions, catering from construction sites to disaster relief efforts, demonstrating adaptability and foresight. Utilities, however, form the bedrock of their revenue, marked by long-term contracts and regulation-guided stability. The energy infrastructure sector further broadens Atco's horizon, with investments in natural gas and electricity generation that pivot towards cleaner energy sources. Meanwhile, the retail energy division targets savvy consumers seeking reliable energy purchases. As Atco occasionally ventures into real estate, particularly through projects in Alberta, it adds another layer of potential growth. This multifaceted approach not only positions Atco as a robust entity across evolving sectors but also as a consistently profitable mainstay in the global marketplace.

View ACO.X Analysis

ACO.X Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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US	Berkshire Hathaway Inc NYSE:BRK.A	Financial Services
US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
US	Palantir Technologies Inc NYSE:PLTR	Technology
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US	Visa Inc NYSE:V	Technology
CN	Alibaba Group Holding Ltd NYSE:BABA	Retail
US	JPMorgan Chase & Co NYSE:JPM	Banking
US	Coca-Cola Co NYSE:KO	Beverages
US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
US	Chevron Corp NYSE:CVX	Energy

	Johnson & Johnson NYSE:JNJ	US
	Berkshire Hathaway Inc NYSE:BRK.A	US
	Bank of America Corp NYSE:BAC	US
	Mastercard Inc NYSE:MA	US
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	Coca-Cola Co NYSE:KO	US
	Walmart Inc NYSE:WMT	US
	Verizon Communications Inc NYSE:VZ	US
	Chevron Corp NYSE:CVX	US

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	Berkshire Hathaway Inc NYSE:BRK.A	758 900.01 USD 1.34%
	Bank of America Corp NYSE:BAC	55.33 USD 0.34%
	Mastercard Inc NYSE:MA	569.13 USD -0.49%
	UnitedHealth Group Inc NYSE:UNH	341.1 USD -0.22%
	Exxon Mobil Corp NYSE:XOM	117.76 USD -0.89%

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	Johnson & Johnson NYSE:JNJ	214.17 USD 1.22%
	Bank of America Corp NYSE:BAC	55.33 USD 0.34%
	Mastercard Inc NYSE:MA	569.13 USD -0.49%
	Salesforce Inc NYSE:CRM	254.58 USD -2.92%
	Abbvie Inc NYSE:ABBV	227.45 USD 1.85%
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Atco Ltd
TSX:ACO.X