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1. Company Snapshot

1.a. Company Description

Capital Power Corporation develops, acquires, owns, and operates renewable and thermal power generation facilities in Canada and the United States.It generates electricity from various energy sources, including wind, solar, waste heat, natural gas, and coal.The company owns an approximately 6,600 megawatts of power generation capacity at 26 facilities.


It also manages its related electricity, natural gas, and emissions portfolios by undertaking trading and marketing activities.The company was founded in 1891 and is headquartered in Edmonton, Canada.

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1.b. Last Insights on CPX

Capital Power Corporation's recent performance was driven by strategic growth initiatives, including the execution of a new long-term contract for Midland Cogeneration Venture through to 2040, with improved economic terms. The company also commissioned 170 MW of battery storage in Ontario. Additionally, a new long-term contract with Consumers Energy for a Michigan plant added US$100 million in annual EBITDA. The company declared dividends for its Common and Preference shares. A C$600 million medium term note offering was also announced.

1.c. Company Highlights

2. Capital Power's Q3 2025 Earnings: A Strong Performance

Capital Power reported a robust financial performance in Q3 2025, with adjusted EBITDA of $477 million, up approximately 20% from the same period last year. The increase was driven by strong contributions from the company's U.S. flexible generation portfolio, following the addition of PJM assets. For the 9 months of 2025, adjusted EBITDA totaled $1.166 billion, 15% higher than the same period last year. The company's actual EPS came in at $0.94, slightly below analyst estimates of $1.02. Revenue growth is expected to continue, with analysts estimating a 6.0% increase in revenues for the next year.

Publication Date: Nov -03

📋 Highlights
  • Adjusted EBITDA Growth: Q3 2025 adjusted EBITDA reached $477 million, a 20% increase YoY, driven by U.S. flexible generation assets and lower emissions costs.
  • Midland Cogeneration Extension: Long-term contract with CMS extended to 2040, securing $1.6B+ in incremental revenue over 10 years, covering 75% of MCV’s 1,600 MW capacity.
  • Battery Storage Expansion: Commissioned first 2 Ontario battery projects with 250 MW contracted to a data center, achieving 100% site capacity utilization under a 15-year contract.
  • Capital Efficiency: Sustaining capital costs estimated at $30–$35/kW (U.S.) and $25/kW (Canada), reflecting disciplined capital allocation across 12 GW North American portfolio.
  • Portfolio Performance: Generated 13.4 TWh in Q3, completing 65% of planned outage days, while U.S. PJM assets achieved higher capacity factors due to seasonal demand.

Operational Highlights

The company's operational performance was also strong, with 13.4 terawatt hours generated across its portfolio and 65% of planned outage days completed for the year. Avik Dey, in the earnings call, highlighted that the company's disciplined approach is driving success across its North American platform, reinforcing its team's ability to consistently deliver, diversify its portfolio, and execute with discipline to drive long-term shareholder value.

Contracting and Expansion

A significant development in the quarter was the execution of a new long-term contract with improved economic terms for Midland Cogeneration Venture, extending the contract to 2040. Additionally, the company has signed a 250-megawatt contract with a data center provider, speaking to 100% of the capacity at the site, with a contract term expected to be around 15 years. The company is also exploring expansion opportunities around its plants, including potential upgrades and recontracting.

Valuation and Outlook

With a P/E Ratio of 24.51 and an EV/EBITDA of 14.32, the market is pricing in a certain level of growth and profitability for Capital Power. The company's ROE of 9.81% and a dividend yield of 3.73% also suggest a relatively attractive valuation. As the company looks to the future, it is well-positioned to capitalize on stronger market fundamentals, with a focus on disciplined execution, thoughtful capital allocation, and operational excellence driving superior shareholder value.

3. NewsRoom

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Capital Power provides notice of Preferred Shares (Series 1) conversion privilege and dividend rate notice

Dec -01

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RBC Says New Alberta-Canada Energy Deal Could Lift Canadian Energy Infrastructure Sector

Nov -28

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Capital Power and the CFL celebrate season wrap-up and $30,000 donation for Indigenous Youth Roots

Nov -26

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We Think That There Are More Issues For Capital Power (TSE:CPX) Than Just Sluggish Earnings

Nov -06

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Capital Power announces a C$600 million medium term note offering and its intention to redeem C$300 million of medium term notes

Nov -05

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Carbon TerraVault Provides Third Quarter 2025 Update

Nov -04

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California Resources Corporation and Capital Power to Explore Decarbonized Power Solutions in California

Nov -04

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Capital Power Corporation Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Nov -01

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.37%)

6. Segments

Energy

Expected Growth: 7.3%

Capital Power Corporation's 7.3% energy growth is driven by increasing demand for clean energy, strategic acquisitions, and investments in renewable energy sources such as wind and solar power. Additionally, favorable government policies and regulations supporting the transition to a low-carbon economy contribute to the company's growth momentum.

Emission Credit

Expected Growth: 10.8%

Capital Power Corporation's 10.8% growth in Emission Credits is driven by increasing demand for carbon offsetting, government incentives for renewable energy, and strategic acquisitions. Additionally, the company's diversified portfolio of emission-reducing projects and strong operational efficiency contribute to its growth momentum.

7. Detailed Products

Electricity Generation

Capital Power Corporation generates electricity through its various power plants, including natural gas, coal, and renewable energy sources.

Wholesale Electricity Sales

The company sells excess electricity to other market participants, such as utilities, retailers, and other generators.

Renewable Energy Solutions

Capital Power Corporation develops and operates renewable energy projects, including wind, solar, and hydroelectric power.

Energy Storage

The company offers energy storage solutions to help stabilize the grid and provide backup power during outages.

Energy Management Services

Capital Power Corporation provides energy management services to help customers optimize their energy usage and reduce costs.

8. Capital Power Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Capital Power Corporation operates in a highly regulated industry, which limits the threat of substitutes. However, the increasing adoption of renewable energy sources and energy storage technologies poses a moderate threat to the company's traditional business model.

Bargaining Power Of Customers

Capital Power Corporation's customers are largely residential and commercial consumers who have limited bargaining power. The company's diversified customer base and long-term contracts also reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Capital Power Corporation relies on a few large suppliers for fuel and equipment. While the company has some bargaining power due to its scale, the suppliers' bargaining power is moderate due to the specialized nature of their products.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the power generation industry. The industry requires significant capital investment, regulatory approvals, and technical expertise, making it difficult for new entrants to compete with established players like Capital Power Corporation.

Intensity Of Rivalry

The power generation industry is highly competitive, with many established players competing for market share. Capital Power Corporation faces intense rivalry from other generators, which can lead to downward pressure on prices and margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 59.69%
Debt Cost 5.47%
Equity Weight 40.31%
Equity Cost 6.86%
WACC 6.03%
Leverage 148.06%

11. Quality Control: Capital Power Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Quality: 5.8

Yield: 10.0

Momentum: 10.0

Volatility: 9.7

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Capital Power

A-Score: 6.6/10

Value: 4.7

Growth: 6.3

Quality: 3.1

Yield: 9.0

Momentum: 8.5

Volatility: 7.7

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Yield: 7.0

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A-Score: 5.9/10

Value: 6.5

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Yield: 3.1

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Volatility: 8.0

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A-Score: 5.1/10

Value: 2.5

Growth: 6.8

Quality: 3.7

Yield: 4.0

Momentum: 9.5

Volatility: 4.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

62.15$

Current Price

62.15$

Potential

-0.00%

Expected Cash-Flows