AECON GROUP INC (ARE.CA) Stock Fundamental Analysis
TSX:ARE - Toronto Stock Exchange - CA00762V1094 - Common Stock - Currency: CAD
Taking everything into account, ARE scores 4 out of 10 in our fundamental rating. ARE was compared to 7 industry peers in the Construction & Engineering industry. ARE may be in some trouble as it scores bad on both profitability and health. ARE is not valued too expensively and it also shows a decent growth rate. 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.
Of the past 5 years ARE 4 years were profitable.
In multiple years ARE reported negative operating cash flow during the last 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 0.72%, ARE is doing worse than 71.43% of the companies in the same industry.
The Return On Equity of ARE (2.81%) is worse than 71.43% of its industry peers.
With a Return On Invested Capital value of 2.31%, ARE is not doing good in the industry: 71.43% of the companies in the same industry are doing better.
| 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 in the lower half of the industry: ARE underperforms 71.43% of its industry peers.
ARE's Operating Margin of 0.94% is on the low side compared to the rest of the industry. ARE is outperformed by 71.43% of its industry peers.
ARE has a Gross Margin of 7.67%. This is in the lower half of the industry: ARE underperforms 71.43% of its industry peers.
In the last couple of years the Gross Margin of ARE has declined.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ARE is destroying value.
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.
ARE has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.06 indicates that ARE is not a great score, but indicates only limited risk for bankruptcy at the moment.
ARE has a Altman-Z score of 2.06. This is in the lower half of the industry: ARE underperforms 71.43% of its industry peers.
ARE has a Debt/Equity ratio of 0.53. This is a neutral value indicating ARE is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.53, ARE belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.53 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.06 |
ROIC/WACC0.23
WACC9.87%
2.3 Liquidity
A Current Ratio of 1.21 indicates that ARE should not have too much problems paying its short term obligations.
ARE has a Current ratio of 1.21. This is comparable to the rest of the industry: ARE outperforms 42.86% of its industry peers.
A Quick Ratio of 1.20 indicates that ARE should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.20, ARE perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
| 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.
Looking at the last year, ARE shows a very strong growth in Revenue. 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 53.93% yearly.
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 Year17.38%
Revenue Next 2Y11.19%
Revenue Next 3Y10.06%
Revenue Next 5YN/A
3.3 Evolution
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
The Price/Earnings ratio is 47.33, which means the current valuation is very expensive for ARE.
ARE's Price/Earnings ratio is a bit more expensive when compared to the industry. ARE is more expensive than 71.43% of the companies in the same industry.
ARE is valuated expensively when we compare the Price/Earnings ratio to 26.76, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 9.59 indicates a reasonable valuation of ARE.
85.71% of the companies in the same industry are more expensive than ARE, based on the Price/Forward Earnings ratio.
ARE is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.91, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.33 | ||
| Fwd PE | 9.59 |
4.2 Price Multiples
71.43% of the companies in the same industry are more expensive than ARE, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 12.37 |
4.3 Compensation for Growth
ARE's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as ARE's earnings are expected to grow with 53.93% in the coming years.
PEG (NY)0.23
PEG (5Y)N/A
EPS Next 2Y101.48%
EPS Next 3Y53.93%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.73%, ARE has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.61, ARE pays a better dividend. On top of this ARE pays more dividend than 100.00% of the companies listed in the same industry.
ARE's Dividend Yield is rather good when compared to the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
5.2 History
The dividend of ARE is nicely growing with an annual growth rate of 6.05%!
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
ARE pays out 190.98% of its income as dividend. 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 2Y101.48%
EPS Next 3Y53.93%
TSX:ARE (8/21/2025, 7:00:00 PM)
20.35
+0.32 (+1.6%)
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 Cap1.28B
Analysts77.33
Price Target23.09 (13.46%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
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)5.06%
PT rev (3m)5.06%
EPS NQ rev (1m)-24.28%
EPS NQ rev (3m)-37.73%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.33 | ||
| Fwd PE | 9.59 | ||
| P/S | 0.26 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.45 | ||
| P/tB | 1.94 | ||
| EV/EBITDA | 12.37 |
EPS(TTM)0.43
EY2.11%
EPS(NY)2.12
Fwd EY10.42%
FCF(TTM)-1.43
FCFYN/A
OCF(TTM)-0.49
OCFYN/A
SpS77.79
BVpS14.08
TBVpS10.5
PEG (NY)0.23
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 | 2.06 |
F-Score4
WACC9.87%
ROIC/WACC0.23
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 Y207.76%
EPS Next 2Y101.48%
EPS Next 3Y53.93%
EPS Next 5YN/A
Revenue 1Y (TTM)20.53%
Revenue growth 3Y2.18%
Revenue growth 5Y4.16%
Sales Q2Q%52.45%
Revenue Next Year17.38%
Revenue Next 2Y11.19%
Revenue Next 3Y10.06%
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%