AECON GROUP INC (ARE.CA) Stock Fundamental Analysis
TSX:ARE - Toronto Stock Exchange - CA00762V1094 - Common Stock - Currency: CAD
We assign a fundamental rating of 3 out of 10 to ARE. ARE was compared to 7 industry peers in the Construction & Engineering industry. Both the profitability and financial health of ARE have multiple concerns. ARE has a decent growth rate and is not valued too expensively. Finally ARE also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
ARE had negative earnings in the past year.
ARE had a negative operating cash flow in the past year.
ARE had positive earnings in 4 of the past 5 years.
In multiple years ARE reported negative operating cash flow during the last 5 years.
1.2 Ratios
With a Return On Assets value of -2.70%, ARE is not doing good in the industry: 71.43% of the companies in the same industry are doing better.
ARE's Return On Equity of -9.98% is on the low side compared to the rest of the industry. ARE is outperformed by 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.7% | ||
| ROE | -9.98% | ||
| ROIC | N/A |
ROA(3y)1.36%
ROA(5y)1.65%
ROE(3y)4.06%
ROE(5y)5.54%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
ARE's Gross Margin of 3.62% is on the low side compared to the rest of the industry. ARE is outperformed by 71.43% of its industry peers.
In the last couple of years the Gross Margin of ARE has declined.
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 | 3.62% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-22.44%
GM growth 5Y-16.54%
2. Health
2.1 Basic Checks
ARE does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, ARE has more shares outstanding
ARE has more shares outstanding than it did 5 years ago.
The debt/assets ratio for ARE is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 1.78, we must say that ARE is in the distress zone and has some risk of bankruptcy.
ARE has a Altman-Z score of 1.78. This is in the lower half of the industry: ARE underperforms 71.43% of its industry peers.
A Debt/Equity ratio of 0.45 indicates that ARE is not too dependend on debt financing.
ARE's Debt to Equity ratio of 0.45 is amongst the best of the industry. ARE outperforms 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.78 |
ROIC/WACCN/A
WACC9.16%
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.
The Current ratio of ARE (1.19) is comparable to the rest of the industry.
ARE has a Quick Ratio of 1.18. This is a normal value and indicates that ARE is financially healthy and should not expect problems in meeting 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 -171.36%.
The Revenue has been growing slightly by 1.70% in the past year.
The Revenue has been growing slightly by 4.16% on average over the past years.
EPS 1Y (TTM)-171.36%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-440%
Revenue 1Y (TTM)1.7%
Revenue growth 3Y2.18%
Revenue growth 5Y4.16%
Sales Q2Q%25.4%
3.2 Future
The Earnings Per Share is expected to grow by 53.93% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 10.06% on average over the next years. This is quite good.
EPS Next Y207.76%
EPS Next 2Y101.48%
EPS Next 3Y53.93%
EPS Next 5YN/A
Revenue Next Year17.22%
Revenue Next 2Y10.79%
Revenue Next 3Y10.06%
Revenue Next 5YN/A
3.3 Evolution
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings Ratio is negative for ARE. In the last year negative earnings were reported.
A Price/Forward Earnings ratio of 9.67 indicates a reasonable valuation of ARE.
Based on the Price/Forward Earnings ratio, ARE is valued cheaply inside the industry as 85.71% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of ARE to the average of the S&P500 Index (35.58), we can say ARE is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 9.67 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ARE's earnings are expected to grow with 53.93% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y101.48%
EPS Next 3Y53.93%
5. Dividend
5.1 Amount
ARE has a Yearly Dividend Yield of 3.64%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.53, ARE pays a better dividend. On top of this ARE pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, ARE pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.64% |
5.2 History
The dividend of ARE is nicely growing with an annual growth rate of 6.05%!
ARE has paid a dividend for at least 10 years, which is 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)6.05%
Div Incr Years1
Div Non Decr Years17
5.3 Sustainability
The earnings of ARE are negative and hence is the payout ratio. ARE will probably not be able to sustain this dividend level.
The dividend of ARE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-51.99%
EPS Next 2Y101.48%
EPS Next 3Y53.93%
TSX:ARE (7/11/2025, 7:00:00 PM)
20.51
-0.36 (-1.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryConstruction & Engineering
Earnings (Last)
Earnings (Next)
Inst Owners20.27%
Inst Owner ChangeN/A
Ins Owners0.67%
Ins Owner ChangeN/A
Market Cap1.29B
Analysts77.33
Price Target21.98 (7.17%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.64% |
Yearly Dividend0.75
Dividend Growth(5Y)6.05%
DP-51.99%
Div Incr Years1
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-144.35%
Min EPS beat(2)-238.86%
Max EPS beat(2)-49.83%
EPS beat(4)2
Avg EPS beat(4)-65.57%
Min EPS beat(4)-238.86%
Max EPS beat(4)18.67%
EPS beat(8)5
Avg EPS beat(8)28.06%
EPS beat(12)8
Avg EPS beat(12)11.59%
EPS beat(16)11
Avg EPS beat(16)9.43%
Revenue beat(2)2
Avg Revenue beat(2)10.09%
Min Revenue beat(2)5.5%
Max Revenue beat(2)14.68%
Revenue beat(4)3
Avg Revenue beat(4)1.15%
Min Revenue beat(4)-16.79%
Max Revenue beat(4)14.68%
Revenue beat(8)4
Avg Revenue beat(8)-2.9%
Revenue beat(12)8
Avg Revenue beat(12)0.4%
Revenue beat(16)10
Avg Revenue beat(16)1.67%
PT rev (1m)0%
PT rev (3m)-18.42%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.21%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)6.93%
Revenue NY rev (1m)0%
Revenue NY rev (3m)6.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 9.67 | ||
| P/S | 0.29 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.41 | ||
| P/tB | 1.9 | ||
| EV/EBITDA | N/A |
EPS(TTM)-1.47
EYN/A
EPS(NY)2.12
Fwd EY10.34%
FCF(TTM)-1.21
FCFYN/A
OCF(TTM)-0.14
OCFYN/A
SpS70.79
BVpS14.53
TBVpS10.78
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.7% | ||
| ROE | -9.98% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 3.62% | ||
| FCFM | N/A |
ROA(3y)1.36%
ROA(5y)1.65%
ROE(3y)4.06%
ROE(5y)5.54%
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 3YN/A
PM growth 5YN/A
GM growth 3Y-22.44%
GM growth 5Y-16.54%
F-Score1
Asset Turnover1.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 70.89% | ||
| Cap/Sales | 1.51% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 1.18 | ||
| Altman-Z | 1.78 |
F-Score1
WACC9.16%
ROIC/WACCN/A
Cap/Depr(3y)44.95%
Cap/Depr(5y)66.77%
Cap/Sales(3y)0.88%
Cap/Sales(5y)1.5%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-171.36%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-440%
EPS Next Y207.76%
EPS Next 2Y101.48%
EPS Next 3Y53.93%
EPS Next 5YN/A
Revenue 1Y (TTM)1.7%
Revenue growth 3Y2.18%
Revenue growth 5Y4.16%
Sales Q2Q%25.4%
Revenue Next Year17.22%
Revenue Next 2Y10.79%
Revenue Next 3Y10.06%
Revenue Next 5YN/A
EBIT growth 1Y-16989.7%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year667.26%
EBIT Next 3Y118.09%
EBIT Next 5YN/A
FCF growth 1Y37.33%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y88.9%
OCF growth 3YN/A
OCF growth 5Y-47.93%