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 correct valuation and a medium growth rate. 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.
The reported operating cash flow has been mixed in the past 5 years: ARE reported negative operating cash flow in multiple years.
1.2 Ratios
The Return On Assets of ARE (-2.70%) is worse than 71.43% of its industry peers.
With a Return On Equity value of -9.98%, 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 | -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
With a Gross Margin value of 3.62%, ARE is not doing good in the industry: 71.43% of the companies in the same industry are doing better.
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 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.
The number of shares outstanding for ARE has been increased compared to 1 year ago.
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 1.74. This is a bad value and indicates that ARE is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.74, ARE is doing worse than 71.43% of the companies in the same industry.
ARE has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of ARE (0.45) is better than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 1.74 |
ROIC/WACCN/A
WACC7.92%
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.
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 comparable to the rest of the 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 -151.24%.
Looking at the last year, ARE shows a small growth in Revenue. The Revenue has grown by 1.70% in the last year.
Measured over the past years, ARE shows a small growth in Revenue. The Revenue has been growing by 4.16% on average per year.
EPS 1Y (TTM)-151.24%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-514.15%
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
Based on estimates for the next years, ARE will show a small growth in Revenue. The Revenue will grow by 6.95% on average per year.
EPS Next Y207.76%
EPS Next 2Y101.48%
EPS Next 3Y53.93%
EPS Next 5YN/A
Revenue Next Year10.83%
Revenue Next 2Y8.01%
Revenue Next 3Y6.95%
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 negative for ARE. In the last year negative earnings were reported.
ARE is valuated reasonably with a Price/Forward Earnings ratio of 8.26.
Based on the Price/Forward Earnings ratio, ARE is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.42. ARE is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 8.26 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
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)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 4.47%, which is a nice return.
The stock price of ARE dropped by -26.86% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
ARE's Dividend Yield is rather good when compared to the industry average which is at 1.93. ARE pays more dividend than 100.00% of the companies in the same industry.
ARE's Dividend Yield is rather good when compared to the S&P500 average which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.47% |
5.2 History
On average, the dividend of ARE grows each year by 6.05%, which is quite nice.
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)6.05%
Div Incr Years0
Div Non Decr Years16
5.3 Sustainability
ARE has negative earnings and hence a negative payout ratio. The dividend may be in danger.
ARE's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP-51.99%
EPS Next 2Y101.48%
EPS Next 3Y53.93%
TSX:ARE (5/6/2025, 7:00:00 PM)
17.51
-0.06 (-0.34%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryConstruction & Engineering
Earnings (Last)
Earnings (Next)
Inst Owners19.06%
Inst Owner ChangeN/A
Ins Owners0.68%
Ins Owner ChangeN/A
Market Cap1.10B
Analysts77.33
Price Target25.55 (45.92%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.47% |
Yearly Dividend0.75
Dividend Growth(5Y)6.05%
DP-51.99%
Div Incr Years0
Div Non Decr Years16
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)2
Avg Revenue beat(2)9.93%
Min Revenue beat(2)5.5%
Max Revenue beat(2)14.37%
Revenue beat(4)3
Avg Revenue beat(4)1.07%
Min Revenue beat(4)-16.79%
Max Revenue beat(4)14.37%
Revenue beat(8)4
Avg Revenue beat(8)-2.94%
Revenue beat(12)8
Avg Revenue beat(12)0.37%
Revenue beat(16)10
Avg Revenue beat(16)1.65%
PT rev (1m)-5.16%
PT rev (3m)-18.73%
EPS NQ rev (1m)-3.21%
EPS NQ rev (3m)-45.16%
EPS NY rev (1m)-0.5%
EPS NY rev (3m)-25.89%
Revenue NQ rev (1m)5.97%
Revenue NQ rev (3m)5.56%
Revenue NY rev (1m)0.89%
Revenue NY rev (3m)0.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 8.26 | ||
| P/S | 0.25 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.2 | ||
| P/tB | 1.62 | ||
| EV/EBITDA | N/A |
EPS(TTM)-1.03
EYN/A
EPS(NY)2.12
Fwd EY12.11%
FCF(TTM)-1.21
FCFYN/A
OCF(TTM)-0.14
OCFYN/A
SpS70.85
BVpS14.54
TBVpS10.79
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 | 1.74 |
F-Score1
WACC7.92%
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)-151.24%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-514.15%
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 Year10.83%
Revenue Next 2Y8.01%
Revenue Next 3Y6.95%
Revenue Next 5YN/A
EBIT growth 1Y-16989.7%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year746.41%
EBIT Next 3Y120.16%
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%