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Transurban Group TCL

Morningstar Rating
A$13.32 +0.15 (1.14%)
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Company Report

Cost Containment and Growing Revenue Stream Bode Well for Long-Term Margins

Transurban is a major toll road investor with concessions to operate 14 Australian and three North American motorways. Concessions grant the right to operate the roads and collect tolls for predetermined amounts of time. The core Australian roads are integral parts of the motorway networks in Australia's three largest cities: Melbourne, Sydney, and Brisbane. The roads benefit from strong competitive advantages, and the assets generate attractive returns on initial investment, warranting a wide economic moat rating.

Price vs Fair Value

TCL is trading at a 5% premium.
Price
A$13.11
Fair Value
A$39.60
Uncertainty
Medium
1-Star Price
A$26.12
5-Star Price
A$1.19
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Core Australian roads generate defensive revenue that grows with traffic volumes and toll price increases, which are at a minimum pegged to inflation. Solid revenue growth and a high fixed-cost base translate to strong cash flow and distribution growth.

Bears

Building and acquiring new roads can destroy equity value as a result of overbidding and overly optimistic traffic forecasts.

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Trading Information

Previous Close Price
A$13.17
Day Range
A$13.21–13.37
52-Week Range
A$11.58–15.23
Bid/Ask
A$13.18 / A$13.39
Market Cap
A$41.19 Bil
Volume/Avg
6.2 Mil / 5.0 Mil

Key Statistics

Price/Earnings (Normalized)
163.92
Price/Sales
9.66
Dividend Yield (Trailing)
4.62%
Dividend Yield (Forward)
4.62%
Total Yield
4.62%

Company Profile

Transurban Group is an owner/operator of toll roads in Melbourne, Sydney, and Brisbane. It also owns toll roads in Virginia, USA and Montreal, Canada. The weighted average concession life across the portfolio is about 28 years. Australian assets contribute around 90% of proportional revenue.
Sector
Industrials
Industry
Infrastructure Operations
Stock Style Box
Large Growth
Total Number of Employees
460

Competitors

Valuation

Metric
TCL
ALX
AIA
Price/Earnings (Normalized)
163.9223.9077.79
Price/Book Value
3.482.291.46
Price/Sales
9.6658.0616.84
Price/Cash Flow
27.13102.2931.23
Price/Earnings
TCL
ALX
AIA

Financial Strength

Metric
TCL
ALX
AIA
Quick Ratio
0.492.880.27
Current Ratio
0.532.900.28
Interest Coverage
1.143.322.75
Quick Ratio
TCL
ALX
AIA

Profitability

Metric
TCL
ALX
AIA
Return on Assets (Normalized)
0.71%3.11%1.09%
Return on Equity (Normalized)
2.11%4.69%1.42%
Return on Invested Capital (Normalized)
2.08%3.88%0.90%
Return on Assets
TCL
ALX
AIA
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Infrastructure Operations Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
FERVF
Ferrovial SE—Kxcz$29.4 Bil
TRAUF
Transurban Group—Rlcc$26.6 Bil
JEXYF
Jiangsu Expressway Co Ltd Class H—Bvgyf$7.5 Bil
JEXYY
Jiangsu Expressway Co Ltd ADR—Blrpjs$7.5 Bil
MAQAF
Atlas Arteria Ltd—Zsfddb$4.8 Bil
VRRM
Verra Mobility Corp Class A—Gfbphc$4.2 Bil
ZHEXF
Zhejiang Expressway Co Ltd Class H—Hwhfb$3.8 Bil
PUODY
Promotora Y Operadora de Infraestructura SAB de CV ADR—Rjpvlxq$3.8 Bil
AUHEF
Anhui Expressway Co Ltd Class H—Yrtc$2.8 Bil
PTJSF
PT Jasa Marga (Persero) Tbk Class B—Rgbj$2.6 Bil

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