Logo image of ARE.CA

AECON GROUP INC (ARE.CA) Stock Fundamental Analysis

TSX:ARE - Toronto Stock Exchange - CA00762V1094 - Common Stock - Currency: CAD

23.94  -0.32 (-1.32%)

Fundamental Rating

3

We assign a fundamental rating of 3 out of 10 to ARE. ARE was compared to 8 industry peers in the Construction & Engineering industry. ARE scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. ARE is valued expensive and it does not seem to be growing.


Dividend Valuation Growth Profitability Health

2

1. Profitability

1.1 Basic Checks

In the past year ARE has reported negative net income.
In the past year ARE had a positive cash flow from operations.
Each year in the past 5 years ARE has been profitable.
The reported operating cash flow has been mixed in the past 5 years: ARE reported negative operating cash flow in multiple years.
ARE.CA Yearly Net Income VS EBIT VS OCF VS FCFARE.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M -100M 200M 300M

1.2 Ratios

ARE has a Return On Assets of -1.92%. This is in the lower half of the industry: ARE underperforms 62.50% of its industry peers.
ARE's Return On Equity of -6.68% is on the low side compared to the rest of the industry. ARE is outperformed by 62.50% of its industry peers.
Industry RankSector 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
ARE.CA Yearly ROA, ROE, ROICARE.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5 10 15

1.3 Margins

In the last couple of years the Profit Margin of ARE has grown nicely.
ARE has a worse Gross Margin (4.22%) than 62.50% 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 RankSector 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%
ARE.CA Yearly Profit, Operating, Gross MarginsARE.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 2 4 6 8 10

5

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 has been reduced compared to a year ago.
ARE.CA Yearly Shares OutstandingARE.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M
ARE.CA Yearly Total Debt VS Total AssetsARE.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B

2.2 Solvency

ARE has an Altman-Z score of 1.83. 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 1.83 is on the low side compared to the rest of the industry. ARE is outperformed by 62.50% of its industry peers.
The Debt to FCF ratio of ARE is 4.89, which is a neutral value as it means it would take ARE, 4.89 years of fcf income to pay off all of its debts.
ARE's Debt to FCF ratio of 4.89 is fine compared to the rest of the industry. ARE outperforms 75.00% of its industry peers.
A Debt/Equity ratio of 0.28 indicates that ARE is not too dependend on debt financing.
With an excellent Debt to Equity ratio value of 0.28, ARE belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.28
Debt/FCF 4.89
Altman-Z 1.83
ROIC/WACCN/A
WACC11.7%
ARE.CA Yearly LT Debt VS Equity VS FCFARE.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M 400M 600M 800M 1B

2.3 Liquidity

A Current Ratio of 1.19 indicates that ARE should not have too much problems paying its short term obligations.
ARE's Current ratio of 1.19 is in line compared to the rest of the industry. ARE outperforms 50.00% of its industry peers.
A Quick Ratio of 1.18 indicates that ARE should not have too much problems paying its short term obligations.
ARE has a Quick ratio (1.18) which is in line with its industry peers.
Industry RankSector Rank
Current Ratio 1.19
Quick Ratio 1.18
ARE.CA Yearly Current Assets VS Current LiabilitesARE.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

2

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.
Looking at the last year, ARE shows a very negative growth in Revenue. The Revenue has decreased by -14.11% in the last year.
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

Based on estimates for the next years, ARE will show a decrease in Earnings Per Share. The EPS will decrease by -1.27% on average per year.
ARE is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.11% yearly.
EPS Next Y-138.32%
EPS Next 2Y-13.68%
EPS Next 3Y6.11%
EPS Next 5Y-1.27%
Revenue Next Year-11.7%
Revenue Next 2Y-1.51%
Revenue Next 3Y0.8%
Revenue Next 5Y1.11%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
ARE.CA Yearly Revenue VS EstimatesARE.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 1B 2B 3B 4B
ARE.CA Yearly EPS VS EstimatesARE.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 1 2

3

4. Valuation

4.1 Price/Earnings Ratio

ARE reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
Based on the Price/Forward Earnings ratio of 15.99, the valuation of ARE can be described as correct.
75.00% of the companies in the same industry are more expensive than ARE, based on the Price/Forward Earnings ratio.
ARE's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 94.77.
Industry RankSector Rank
PE N/A
Fwd PE 15.99
ARE.CA Price Earnings VS Forward Price EarningsARE.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 20 -20 40 60 80

4.2 Price Multiples

100.00% of the companies in the same industry are more expensive than ARE, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 15.56
EV/EBITDA N/A
ARE.CA Per share dataARE.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 20 40 60

4.3 Compensation for Growth

PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-13.68%
EPS Next 3Y6.11%

6

5. Dividend

5.1 Amount

ARE has a Yearly Dividend Yield of 3.13%. Purely for dividend investing, there may be better candidates out there.
ARE's Dividend Yield is rather good when compared to the industry average which is at 1.63. ARE pays more dividend than 87.50% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, ARE pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 3.13%

5.2 History

The dividend of ARE is nicely growing with an annual growth rate of 8.17%!
ARE has paid a dividend for at least 10 years, which is a reliable track record.
ARE has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.17%
Div Incr Years0
Div Non Decr Years16
ARE.CA Yearly Dividends per shareARE.CA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.2 0.4 0.6

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.
DP-73.05%
EPS Next 2Y-13.68%
EPS Next 3Y6.11%
ARE.CA Yearly Income VS Free CF VS DividendARE.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M -100M

AECON GROUP INC

TSX:ARE (2/7/2025, 7:00:00 PM)

23.94

-0.32 (-1.32%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryConstruction & Engineering
Earnings (Last)10-31 2024-10-31/amc
Earnings (Next)03-05 2025-03-05/amc
Inst Owners18.24%
Inst Owner ChangeN/A
Ins Owners0.72%
Ins Owner ChangeN/A
Market Cap1.49B
Analysts76
Price Target31.43 (31.29%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 3.13%
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)0.59%
PT rev (3m)35.06%
EPS NQ rev (1m)-7.22%
EPS NQ rev (3m)11.68%
EPS NY rev (1m)-2.55%
EPS NY rev (3m)5.02%
Revenue NQ rev (1m)-0.83%
Revenue NQ rev (3m)2.67%
Revenue NY rev (1m)-0.19%
Revenue NY rev (3m)0.69%
Valuation
Industry RankSector Rank
PE N/A
Fwd PE 15.99
P/S 0.36
P/FCF 15.56
P/OCF 10.16
P/B 1.56
P/tB 1.93
EV/EBITDA N/A
EPS(TTM)-1.09
EYN/A
EPS(NY)1.5
Fwd EY6.26%
FCF(TTM)1.54
FCFY6.43%
OCF(TTM)2.36
OCFY9.85%
SpS65.83
BVpS15.33
TBVpS12.42
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector 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 RankSector 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 1.83
F-Score2
WACC11.7%
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-11.7%
Revenue Next 2Y-1.51%
Revenue Next 3Y0.8%
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%