AECON GROUP INC (ARE.CA) Stock Fundamental Analysis
TSX:ARE - Toronto Stock Exchange - CA00762V1094 - Common Stock - Currency: CAD
Overall ARE gets a fundamental rating of 3 out of 10. We evaluated ARE against 7 industry peers in the Construction & Engineering industry. The financial health of ARE is average, but there are quite some concerns on its profitability. ARE has a expensive valuation and it also scores bad on growth.
1. Profitability
1.1 Basic Checks
ARE had negative earnings in the past year.
In the past year ARE had a positive cash flow from operations.
ARE had positive earnings in each of the past 5 years.
The reported operating cash flow has been mixed in the past 5 years: ARE reported negative operating cash flow in multiple years.
1.2 Ratios
The Return On Assets of ARE (-1.92%) is worse than 71.43% of its industry peers.
ARE has a Return On Equity of -6.68%. This is in the lower half of the industry: ARE underperforms 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.92% | ||
| ROE | -6.68% | ||
| ROIC | N/A |
ROA(3y)2.48%
ROA(5y)2.49%
ROE(3y)7.94%
ROE(5y)8.48%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
In the last couple of years the Profit Margin of ARE has grown nicely.
ARE has a Gross Margin of 4.22%. This is in the lower half of the industry: ARE underperforms 71.43% of its industry peers.
ARE's Gross Margin has declined in the last couple of years.
ARE does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 4.22% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y13.01%
PM growth 5Y14.05%
GM growth 3Y-20.64%
GM growth 5Y-12.82%
2. Health
2.1 Basic Checks
ARE does not have a ROIC to compare to the WACC, probably because it is not profitable.
ARE has more shares outstanding than it did 1 year ago.
The number of shares outstanding for ARE has been increased compared to 5 years ago.
Compared to 1 year ago, ARE has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 1.82 indicates that ARE is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 1.82, ARE is doing worse than 71.43% of the companies in the same industry.
ARE has a debt to FCF ratio of 4.89. This is a neutral value as ARE would need 4.89 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.89, ARE is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
A Debt/Equity ratio of 0.28 indicates that ARE is not too dependend on debt financing.
The Debt to Equity ratio of ARE (0.28) is better than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 4.89 | ||
| Altman-Z | 1.82 |
ROIC/WACCN/A
WACC10.25%
2.3 Liquidity
ARE has a Current Ratio of 1.19. This is a normal value and indicates that ARE is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.19, ARE perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
A Quick Ratio of 1.18 indicates that ARE should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.18, ARE is in line with its industry, outperforming 42.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.18 |
3. Growth
3.1 Past
ARE shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -151.42%.
Measured over the past years, ARE shows a quite strong growth in Earnings Per Share. The EPS has been growing by 19.64% on average per year.
ARE shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -14.11%.
The Revenue has been growing slightly by 7.29% on average over the past years.
EPS 1Y (TTM)-151.42%
EPS 3Y20.11%
EPS 5Y19.64%
EPS Q2Q%-47.85%
Revenue 1Y (TTM)-14.11%
Revenue growth 3Y8.42%
Revenue growth 5Y7.29%
Sales Q2Q%2.89%
3.2 Future
The Earnings Per Share is expected to decrease by -1.27% on average over the next years.
The Revenue is expected to grow by 1.11% on average over the next years.
EPS Next Y-138.32%
EPS Next 2Y-13.68%
EPS Next 3Y6.11%
EPS Next 5Y-1.27%
Revenue Next Year-11.68%
Revenue Next 2Y-1.5%
Revenue Next 3Y0.81%
Revenue Next 5Y1.11%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
ARE reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
A Price/Forward Earnings ratio of 15.49 indicates a correct valuation of ARE.
Based on the Price/Forward Earnings ratio, ARE is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 22.68. ARE is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 15.49 |
4.2 Price Multiples
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ARE indicates a rather cheap valuation: ARE is cheaper than 100.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.21 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-13.68%
EPS Next 3Y6.11%
5. Dividend
5.1 Amount
ARE has a Yearly Dividend Yield of 3.30%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of ARE has falen by -20.44%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
ARE's Dividend Yield is rather good when compared to the industry average which is at 1.74. ARE pays more dividend than 85.71% of the companies in the same industry.
ARE's Dividend Yield is a higher than the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
5.2 History
On average, the dividend of ARE grows each year by 8.17%, which is quite nice.
ARE has been paying a dividend for at least 10 years, so it has a reliable track record.
ARE has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.17%
Div Incr Years0
Div Non Decr Years16
5.3 Sustainability
ARE has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-73.05%
EPS Next 2Y-13.68%
EPS Next 3Y6.11%
TSX:ARE (2/21/2025, 7:00:00 PM)
23.2
+0.15 (+0.65%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryConstruction & Engineering
Earnings (Last)
Earnings (Next)
Inst Owners19.06%
Inst Owner ChangeN/A
Ins Owners0.68%
Ins Owner ChangeN/A
Market Cap1.46B
Analysts76
Price Target31.25 (34.7%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.3% |
Yearly Dividend0.74
Dividend Growth(5Y)8.17%
DP-73.05%
Div Incr Years0
Div Non Decr Years16
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.21%
Min EPS beat(2)7.76%
Max EPS beat(2)18.67%
EPS beat(4)3
Avg EPS beat(4)8.73%
Min EPS beat(4)-41.37%
Max EPS beat(4)49.87%
EPS beat(8)7
Avg EPS beat(8)71.85%
EPS beat(12)9
Avg EPS beat(12)30.95%
EPS beat(16)12
Avg EPS beat(16)30.8%
Revenue beat(2)1
Avg Revenue beat(2)-7.78%
Min Revenue beat(2)-16.79%
Max Revenue beat(2)1.22%
Revenue beat(4)1
Avg Revenue beat(4)-9.83%
Min Revenue beat(4)-16.79%
Max Revenue beat(4)1.22%
Revenue beat(8)4
Avg Revenue beat(8)-3.7%
Revenue beat(12)7
Avg Revenue beat(12)0.29%
Revenue beat(16)10
Avg Revenue beat(16)1.6%
PT rev (1m)0%
PT rev (3m)2.43%
EPS NQ rev (1m)-7.22%
EPS NQ rev (3m)-7.22%
EPS NY rev (1m)-2.55%
EPS NY rev (3m)5.02%
Revenue NQ rev (1m)-0.83%
Revenue NQ rev (3m)-0.83%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.72%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 15.49 | ||
| P/S | 0.36 | ||
| P/FCF | 15.21 | ||
| P/OCF | 9.93 | ||
| P/B | 1.53 | ||
| P/tB | 1.89 | ||
| EV/EBITDA | N/A |
EPS(TTM)-1.09
EYN/A
EPS(NY)1.5
Fwd EY6.45%
FCF(TTM)1.52
FCFY6.57%
OCF(TTM)2.34
OCFY10.07%
SpS65.26
BVpS15.19
TBVpS12.31
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.92% | ||
| ROE | -6.68% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 4.22% | ||
| FCFM | 2.34% |
ROA(3y)2.48%
ROA(5y)2.49%
ROE(3y)7.94%
ROE(5y)8.48%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3Y13.01%
PM growth 5Y14.05%
GM growth 3Y-20.64%
GM growth 5Y-12.82%
F-Score2
Asset Turnover1.23
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 4.89 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 66.99% | ||
| Cap/Sales | 1.24% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.18 | ||
| Altman-Z | 1.82 |
F-Score2
WACC10.25%
ROIC/WACCN/A
Cap/Depr(3y)40.44%
Cap/Depr(5y)98.28%
Cap/Sales(3y)0.81%
Cap/Sales(5y)2.44%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-151.42%
EPS 3Y20.11%
EPS 5Y19.64%
EPS Q2Q%-47.85%
EPS Next Y-138.32%
EPS Next 2Y-13.68%
EPS Next 3Y6.11%
EPS Next 5Y-1.27%
Revenue 1Y (TTM)-14.11%
Revenue growth 3Y8.42%
Revenue growth 5Y7.29%
Sales Q2Q%2.89%
Revenue Next Year-11.68%
Revenue Next 2Y-1.5%
Revenue Next 3Y0.81%
Revenue Next 5Y1.11%
EBIT growth 1Y-6425.47%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year2.75%
EBIT Next 3Y67.68%
EBIT Next 5Y41.41%
FCF growth 1Y185.1%
FCF growth 3Y-41.28%
FCF growth 5Y-29.38%
OCF growth 1Y290.44%
OCF growth 3Y-42.81%
OCF growth 5Y-32.66%