A&W FOOD SERVICES OF CANADA (AW.CA) Stock Fundamental Analysis
TSX:AW - Toronto Stock Exchange - CA0002251027 - Common Stock - Currency: CAD
Taking everything into account, AW scores 4 out of 10 in our fundamental rating. AW was compared to 19 industry peers in the Hotels, Restaurants & Leisure industry. AW has a medium profitability rating, but doesn't score so well on its financial health evaluation. AW is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
AW had positive earnings in the past year.
AW had a positive operating cash flow in the past year.
1.2 Ratios
AW's Return On Assets of 0.98% is in line compared to the rest of the industry. AW outperforms 57.89% of its industry peers.
The Return On Equity of AW (7.26%) is better than 63.16% of its industry peers.
AW's Return On Invested Capital of 2.60% is in line compared to the rest of the industry. AW outperforms 47.37% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AW is significantly below the industry average of 7.90%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.98% | ||
| ROE | 7.26% | ||
| ROIC | 2.6% |
ROA(3y)2.52%
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)2.73%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 4.06%, AW is in the better half of the industry, outperforming 63.16% of the companies in the same industry.
AW's Profit Margin has declined in the last couple of years.
AW's Operating Margin of 15.53% is fine compared to the rest of the industry. AW outperforms 68.42% of its industry peers.
AW's Operating Margin has improved in the last couple of years.
AW's Gross Margin of 84.93% is amongst the best of the industry. AW outperforms 94.74% of its industry peers.
AW's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.53% | ||
| PM (TTM) | 4.06% | ||
| GM | 84.93% |
OM growth 3Y3.59%
OM growth 5YN/A
PM growth 3Y-34.57%
PM growth 5YN/A
GM growth 3Y1.67%
GM growth 5YN/A
2. Health
2.1 Basic Checks
AW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, AW has about the same amount of shares outstanding.
The debt/assets ratio for AW is higher compared to a year ago.
2.2 Solvency
AW has an Altman-Z score of 0.51. This is a bad value and indicates that AW is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of AW (0.51) is comparable to the rest of the industry.
The Debt to FCF ratio of AW is 15.70, which is on the high side as it means it would take AW, 15.70 years of fcf income to pay off all of its debts.
AW has a Debt to FCF ratio (15.70) which is comparable to the rest of the industry.
A Debt/Equity ratio of 5.37 is on the high side and indicates that AW has dependencies on debt financing.
With a Debt to Equity ratio value of 5.37, AW is not doing good in the industry: 63.16% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.37 | ||
| Debt/FCF | 15.7 | ||
| Altman-Z | 0.51 |
ROIC/WACC0.51
WACC5.11%
2.3 Liquidity
A Current Ratio of 0.93 indicates that AW may have some problems paying its short term obligations.
AW has a Current ratio of 0.93. This is in the better half of the industry: AW outperforms 63.16% of its industry peers.
AW has a Quick Ratio of 0.93. This is a bad value and indicates that AW is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.83, AW is in the better half of the industry, outperforming 68.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
AW shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -50.72%.
AW shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -30.60% yearly.
The Revenue has decreased by -2.34% in the past year.
Measured over the past years, AW shows a small growth in Revenue. The Revenue has been growing by 6.06% on average per year.
EPS 1Y (TTM)-50.72%
EPS 3Y-30.6%
EPS 5YN/A
EPS Q2Q%N/A
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y6.06%
Revenue growth 5YN/A
Sales Q2Q%N/A
3.2 Future
AW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 134.38% yearly.
Based on estimates for the next years, AW will show a quite strong growth in Revenue. The Revenue will grow by 11.37% on average per year.
EPS Next Y413.96%
EPS Next 2Y134.38%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year14.88%
Revenue Next 2Y11.37%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 66.43, the valuation of AW can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as AW.
The average S&P500 Price/Earnings ratio is at 28.79. AW is valued rather expensively when compared to this.
AW is valuated correctly with a Price/Forward Earnings ratio of 12.79.
Based on the Price/Forward Earnings ratio, AW is valued a bit cheaper than the industry average as 78.95% of the companies are valued more expensively.
AW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.38, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 66.43 | ||
| Fwd PE | 12.79 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AW is valued a bit cheaper than the industry average as 63.16% of the companies are valued more expensively.
AW's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AW is cheaper than 63.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.39 | ||
| EV/EBITDA | 32.45 |
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.
AW's earnings are expected to grow with 134.38% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.16
PEG (5Y)N/A
EPS Next 2Y134.38%
EPS Next 3YN/A
5. Dividend
5.1 Amount
AW has a Yearly Dividend Yield of 5.25%, which is a nice return.
Compared to an average industry Dividend Yield of 4.78, AW pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.47, AW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.25% |
5.2 History
AW is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr YearsN/A
Div Non Decr YearsN/A
5.3 Sustainability
AW pays out 237.76% of its income as dividend. This is not a sustainable payout ratio.
DP237.76%
EPS Next 2Y134.38%
EPS Next 3YN/A
TSX:AW (4/25/2025, 7:00:00 PM)
32.55
-0.03 (-0.09%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners5.96%
Inst Owner ChangeN/A
Ins Owners25.2%
Ins Owner ChangeN/A
Market Cap781.20M
Analysts42.22
Price Target36.72 (12.81%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.25% |
Yearly Dividend1.18
Dividend Growth(5Y)N/A
DP237.76%
Div Incr YearsN/A
Div Non Decr YearsN/A
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-5.26%
PT rev (3m)N/A
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)N/A
EPS NY rev (3m)N/A
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)N/A
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 66.43 | ||
| Fwd PE | 12.79 | ||
| P/S | 2.67 | ||
| P/FCF | 13.39 | ||
| P/OCF | 12.76 | ||
| P/B | 4.77 | ||
| P/tB | N/A | ||
| EV/EBITDA | 32.45 |
EPS(TTM)0.49
EY1.51%
EPS(NY)2.54
Fwd EY7.82%
FCF(TTM)2.43
FCFY7.47%
OCF(TTM)2.55
OCFY7.84%
SpS12.18
BVpS6.82
TBVpS-11.81
PEG (NY)0.16
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.98% | ||
| ROE | 7.26% | ||
| ROCE | 4.18% | ||
| ROIC | 2.6% | ||
| ROICexc | 2.65% | ||
| ROICexgc | 4.58% | ||
| OM | 15.53% | ||
| PM (TTM) | 4.06% | ||
| GM | 84.93% | ||
| FCFM | 19.95% |
ROA(3y)2.52%
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)2.73%
ROIC(5y)N/A
ROICexc(3y)2.76%
ROICexc(5y)N/A
ROICexgc(3y)3.42%
ROICexgc(5y)N/A
ROCE(3y)4.45%
ROCE(5y)N/A
ROICexcg growth 3Y16.71%
ROICexcg growth 5YN/A
ROICexc growth 3Y-2.73%
ROICexc growth 5YN/A
OM growth 3Y3.59%
OM growth 5YN/A
PM growth 3Y-34.57%
PM growth 5YN/A
GM growth 3Y1.67%
GM growth 5YN/A
F-Score5
Asset Turnover0.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.37 | ||
| Debt/FCF | 15.7 | ||
| Debt/EBITDA | 17.05 | ||
| Cap/Depr | 46.68% | ||
| Cap/Sales | 0.99% | ||
| Interest Coverage | 40.85 | ||
| Cash Conversion | 118.64% | ||
| Profit Quality | 491.01% | ||
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.83 | ||
| Altman-Z | 0.51 |
F-Score5
WACC5.11%
ROIC/WACC0.51
Cap/Depr(3y)90.11%
Cap/Depr(5y)N/A
Cap/Sales(3y)1.52%
Cap/Sales(5y)N/A
Profit Quality(3y)182.81%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-50.72%
EPS 3Y-30.6%
EPS 5YN/A
EPS Q2Q%N/A
EPS Next Y413.96%
EPS Next 2Y134.38%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y6.06%
Revenue growth 5YN/A
Sales Q2Q%N/A
Revenue Next Year14.88%
Revenue Next 2Y11.37%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y22.47%
EBIT growth 3Y9.87%
EBIT growth 5YN/A
EBIT Next Year125.02%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y350.36%
FCF growth 3Y38%
FCF growth 5YN/A
OCF growth 1Y223.05%
OCF growth 3Y35.37%
OCF growth 5YN/A