AECON GROUP INC (ARE.CA) Stock Fundamental Analysis
Canada - TSX:ARE - CA00762V1094 - Common Stock
23.42 CAD
-0.34 (-1.43%)
We assign a fundamental rating of 3 out of 10 to ARE. ARE was compared to 6 industry peers in the Construction & Engineering industry. ARE may be in some trouble as it scores bad on both profitability and health. 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 positive 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
The Return On Assets of ARE (0.72%) is worse than 83.33% of its industry peers.
The Return On Equity of ARE (2.81%) is worse than 83.33% of its industry peers.
The Return On Invested Capital of ARE (2.31%) is worse than 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.72% | ||
| ROE | 2.81% | ||
| ROIC | 2.32% |
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 has a Profit Margin of 0.51%. This is amonst the worse of the industry: ARE underperforms 83.33% of its industry peers.
Looking at the Operating Margin, with a value of 0.94%, ARE is doing worse than 83.33% of the companies in the same industry.
ARE has a Gross Margin of 7.67%. This is amonst the worse of the industry: ARE underperforms 83.33% of its industry peers.
ARE's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.94% | ||
| PM (TTM) | 0.51% | ||
| GM | 7.67% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ARE is destroying value.
Compared to 1 year ago, ARE has more shares outstanding
Compared to 5 years ago, ARE has more shares outstanding
Compared to 1 year ago, ARE has a worse debt to assets ratio.
2.2 Solvency
ARE has an Altman-Z score of 2.12. This is not the best score and indicates that ARE is in the grey zone with still only limited risk for bankruptcy at the moment.
ARE's Altman-Z score of 2.12 is on the low side compared to the rest of the industry. ARE is outperformed by 83.33% of its industry peers.
A Debt/Equity ratio of 0.53 indicates that ARE is somewhat dependend on debt financing.
The Debt to Equity ratio of ARE (0.53) is better than 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.12 |
ROIC/WACC0.25
WACC9.09%
2.3 Liquidity
A Current Ratio of 1.21 indicates that ARE should not have too much problems paying its short term obligations.
With a Current ratio value of 1.21, ARE is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
ARE has a Quick Ratio of 1.20. This is a normal value and indicates that ARE is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of ARE (1.20) is worse than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.21 | ||
| Quick Ratio | 1.2 |
3. Growth
3.1 Past
ARE shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 238.71%, which is quite impressive.
ARE shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.53%.
ARE shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.16% yearly.
EPS 1Y (TTM)238.71%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%95.48%
Revenue 1Y (TTM)20.53%
Revenue growth 3Y2.18%
Revenue growth 5Y4.16%
Sales Q2Q%52.45%
3.2 Future
ARE is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 50.62% yearly.
Based on estimates for the next years, ARE will show a quite strong growth in Revenue. The Revenue will grow by 10.41% on average per year.
EPS Next Y116.34%
EPS Next 2Y87.03%
EPS Next 3Y50.62%
EPS Next 5YN/A
Revenue Next Year22.42%
Revenue Next 2Y13.85%
Revenue Next 3Y10.41%
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
ARE is valuated quite expensively with a Price/Earnings ratio of 54.47.
Based on the Price/Earnings ratio, ARE is valued expensively inside the industry as 83.33% of the companies are valued cheaper.
ARE is valuated expensively when we compare the Price/Earnings ratio to 27.38, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 15.18, the valuation of ARE can be described as correct.
Based on the Price/Forward Earnings ratio, ARE is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of ARE to the average of the S&P500 Index (22.86), we can say ARE is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.47 | ||
| Fwd PE | 15.18 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ARE is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 13.94 |
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 50.62% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.47
PEG (5Y)N/A
EPS Next 2Y87.03%
EPS Next 3Y50.62%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.20%, ARE has a reasonable but not impressive dividend return.
ARE's Dividend Yield is rather good when compared to the industry average which is at 1.44. ARE pays more dividend than 100.00% of the companies in the same industry.
ARE's Dividend Yield is a higher than the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.2% |
5.2 History
On average, the dividend of ARE grows each year by 6.05%, 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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.05%
Div Incr Years1
Div Non Decr Years17
5.3 Sustainability
190.98% of the earnings are spent on dividend by ARE. This is not a sustainable payout ratio.
The dividend of ARE is growing, but earnings are growing more, so the dividend growth is sustainable.
DP190.98%
EPS Next 2Y87.03%
EPS Next 3Y50.62%
TSX:ARE (9/19/2025, 7:00:00 PM)
23.42
-0.34 (-1.43%)
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 Cap1.49B
Analysts77.33
Price Target23.74 (1.37%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.2% |
Yearly Dividend0.75
Dividend Growth(5Y)6.05%
DP190.98%
Div Incr Years1
Div Non Decr Years17
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-249.62%
Min EPS beat(2)-260.38%
Max EPS beat(2)-238.86%
EPS beat(4)1
Avg EPS beat(4)-135.33%
Min EPS beat(4)-260.38%
Max EPS beat(4)7.76%
EPS beat(8)4
Avg EPS beat(8)-33.33%
EPS beat(12)8
Avg EPS beat(12)2.44%
EPS beat(16)10
Avg EPS beat(16)-10.95%
Revenue beat(2)2
Avg Revenue beat(2)16.07%
Min Revenue beat(2)14.68%
Max Revenue beat(2)17.47%
Revenue beat(4)4
Avg Revenue beat(4)9.72%
Min Revenue beat(4)1.22%
Max Revenue beat(4)17.47%
Revenue beat(8)4
Avg Revenue beat(8)-0.77%
Revenue beat(12)8
Avg Revenue beat(12)1.07%
Revenue beat(16)10
Avg Revenue beat(16)2.39%
PT rev (1m)2.81%
PT rev (3m)8.02%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-39.62%
EPS NY rev (1m)0%
EPS NY rev (3m)-84.83%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)4.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.47 | ||
| Fwd PE | 15.18 | ||
| P/S | 0.3 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.68 | ||
| P/tB | 2.26 | ||
| EV/EBITDA | 13.94 |
EPS(TTM)0.43
EY1.84%
EPS(NY)1.54
Fwd EY6.59%
FCF(TTM)-1.41
FCFYN/A
OCF(TTM)-0.49
OCFYN/A
SpS76.93
BVpS13.92
TBVpS10.38
PEG (NY)0.47
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.72% | ||
| ROE | 2.81% | ||
| ROCE | 3.22% | ||
| ROIC | 2.32% | ||
| ROICexc | 2.53% | ||
| ROICexgc | 3.06% | ||
| OM | 0.94% | ||
| PM (TTM) | 0.51% | ||
| GM | 7.67% | ||
| 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-Score4
Asset Turnover1.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 3.22 | ||
| Cap/Depr | 58.64% | ||
| Cap/Sales | 1.21% | ||
| Interest Coverage | 1.6 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.21 | ||
| Quick Ratio | 1.2 | ||
| Altman-Z | 2.12 |
F-Score4
WACC9.09%
ROIC/WACC0.25
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)238.71%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%95.48%
EPS Next Y116.34%
EPS Next 2Y87.03%
EPS Next 3Y50.62%
EPS Next 5YN/A
Revenue 1Y (TTM)20.53%
Revenue growth 3Y2.18%
Revenue growth 5Y4.16%
Sales Q2Q%52.45%
Revenue Next Year22.42%
Revenue Next 2Y13.85%
Revenue Next 3Y10.41%
Revenue Next 5YN/A
EBIT growth 1Y124.8%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year667.26%
EBIT Next 3Y118.09%
EBIT Next 5YN/A
FCF growth 1Y64.24%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y85.23%
OCF growth 3YN/A
OCF growth 5Y-47.93%