TransAltaTAC 51 Interest Coverage is 1.16 as of Mar. 2026, which is 34% below its 10-year median of 1.77. GuruFocus rates TAC with a GF Score™ of 51/100 and a GF Value™ of $6.86 (Significantly Overvalued). The stock has 6 warning signs investors should review. Among 320 Utilities - Independent Power Producers companies, TransAlta ranks worse than 96.56% on this metric.
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. TransAlta's
Operating Income
for the
three
months ended in Mar. 2026 was $53 Mil. TransAlta's Interest Expense for the
three
months ended in Mar. 2026 was $-46 Mil.
TransAlta's interest coverage for the quarter that ended in Mar. 2026 was 1.16.
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. TransAlta Corps earnings cannot cover its interest expense. If the situation continues, the company may have to issue more debt.
The historical rank and industry rank for TransAlta's Interest Coverage or its related term are showing as below:
TAC'
s Interest Coverage Range Over the Past 10 Years
Min: 0.16 Med: 1.77 Max: 4.68
Current: 0.16
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 .
TransAlta Interest Coverage Related Terms
TransAlta Interest Coverage Historical Data
* Premium members only.
The historical data trend for TransAlta'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.
TAC vs CEG, VST, NRG: Interest Coverage Comparison
For the Utilities - Independent Power Producers subindustry, TransAlta'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.
TransAlta Interest Coverage vs Utilities - Independent Power Producers Industry
For the Utilities - Independent Power Producers industry and Utilities sector, TransAlta's Interest Coverage distribution charts can be found below:
* The bar in red indicates where TransAlta's Interest Coverage falls into.
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:
* 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.
TransAlta (TAC) has a Interest Coverage of 1.16 as of Mar. 2026. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on TransAlta and its competitors. This is 34% below median its historical median of 1.77. Over the past decade, TransAlta's Interest Coverage has ranged from 0.16 to 4.68. According to the industry distribution chart, TransAlta ranks #309 out of 320 companies in the Utilities - Independent Power Producers industry, placing it in the top 96.6%.
Is TransAlta's Interest Coverage too high?
TransAlta's current Interest Coverage of 1.16 is 34% below median its 10-year median of 1.77. Over the past 10 years, this metric has ranged from a low of 0.16 to a high of 4.68. The Utilities - Independent Power Producers industry median Interest Coverage is 2.95. TransAlta's value of 1.16 is 60.7% below this industry median. Based on the distribution chart, TransAlta ranks #309 out of 320 companies in the Utilities - Independent Power Producers industry, which is in the bottom quartile relative to peers. Overall, TransAlta has a GF Score™ of 51/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does TransAlta's Interest Coverage compare to CEG and VST?
According to the Utilities - Independent Power Producers industry distribution chart, TransAlta ranks #309 out of 320 companies for Interest Coverage. This places TransAlta in the lower half of its industry. The industry median Interest Coverage is 2.95. TransAlta's value of 1.16 is 60.7% below this benchmark. Historically, TransAlta's own Interest Coverage has ranged from 0.16 to 4.68 over the past decade. While the company's 10-year median is 1.77 vs. the industry median of 2.95, TransAlta has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Interest Coverage for an Utilities - Independent Power Producers company?
The median Interest Coverage among Utilities - Independent Power Producers companies is 2.95, based on 320 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. TransAlta's current Interest Coverage of 1.16 is 60.7% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on TransAlta and its competitors. For the Utilities - Independent Power Producers industry, the median Interest Coverage is 2.95 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. TransAlta's current Interest Coverage is 1.16, which is 34% below median its own 10-year median of 1.77. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is TransAlta stock overvalued right now?
Based on GuruFocus' analysis, TransAlta (TAC) is currently considered Significantly Overvalued. The stock's GF Value™ is $6.86, compared to a current price of $13.69 — trading 99.6% above its estimated fair value. The current Interest Coverage is 1.16, which is 34% below median its 10-year median of 1.77 and 60.7% below the Utilities - Independent Power Producers industry median of 2.95. TransAlta's overall GF Score™ is 51/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For TransAlta (TAC), the current Interest Coverage is 1.16 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is TransAlta (TAC) Overvalued in 2026?
Based on GuruFocus' analysis, TransAlta stock appears to be overvalued.
The current stock price of $13.69 is trading 99.6% above its estimated GF Value™ of $6.86.
GuruFocus considers TransAlta to be Significantly Overvalued.
Key valuation signals for TAC:
Interest Coverage: 1.16 (34% below median its 10-year median of 1.77)
GF Value™: $6.86 vs. price of $13.69 (99.6% above fair value)
Industry Position: 60.7% below the Utilities - Independent Power Producers median (#309 of 320)
No single metric tells the full story. See the TAC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
TransAlta Corp is an independent power producer based in Alberta, Canada. The company operates a diverse electrical power generation assets in Canada, the United States, and Western Australia. The company has reportable segments namely, Hydro, Wind & Solar, Gas, Energy Transition segment and Corporate Segment. The company generates the majority of its revenue from the gas segment.
51GF Score
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