A&W FOOD SERVICES OF CANADA (AW.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:AW - CA0002251027 - Common Stock
37.5 CAD
-0.05 (-0.13%)
Taking everything into account, AW scores 4 out of 10 in our fundamental rating. AW was compared to 18 industry peers in the Hotels, Restaurants & Leisure industry. There are concerns on the financial health of AW while its profitability can be described as average. AW has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year AW was profitable.
In the past year AW had a positive cash flow from operations.
1.2 Ratios
AW has a Return On Assets (2.27%) which is in line with its industry peers.
The Return On Equity of AW (13.07%) is better than 88.89% of its industry peers.
AW has a Return On Invested Capital of 4.96%. This is comparable to the rest of the industry: AW outperforms 55.56% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AW is below the industry average of 6.52%.
The last Return On Invested Capital (4.96%) for AW is above the 3 year average (2.73%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.27% | ||
| ROE | 13.07% | ||
| ROIC | 4.96% |
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
The Profit Margin of AW (9.58%) is better than 66.67% of its industry peers.
In the last couple of years the Profit Margin of AW has declined.
AW has a Operating Margin of 30.63%. This is amongst the best in the industry. AW outperforms 83.33% of its industry peers.
In the last couple of years the Operating Margin of AW has grown nicely.
Looking at the Gross Margin, with a value of 98.04%, AW belongs to the top of the industry, outperforming 94.44% of the companies in the same industry.
In the last couple of years the Gross Margin of AW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.63% | ||
| PM (TTM) | 9.58% | ||
| GM | 98.04% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AW is destroying value.
The number of shares outstanding for AW remains at a similar level compared to 1 year ago.
Compared to 1 year ago, AW has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.76, we must say that AW is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AW (0.76) is comparable to the rest of the industry.
The Debt to FCF ratio of AW is 25.25, which is on the high side as it means it would take AW, 25.25 years of fcf income to pay off all of its debts.
AW has a Debt to FCF ratio of 25.25. This is comparable to the rest of the industry: AW outperforms 44.44% of its industry peers.
AW has a Debt/Equity ratio of 4.02. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 4.02, AW is not doing good in the industry: 61.11% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.02 | ||
| Debt/FCF | 25.25 | ||
| Altman-Z | 0.76 |
ROIC/WACC0.99
WACC5.01%
2.3 Liquidity
AW has a Current Ratio of 0.90. This is a bad value and indicates that AW is not financially healthy enough and could expect problems in meeting its short term obligations.
AW has a Current ratio (0.90) which is comparable to the rest of the industry.
A Quick Ratio of 0.84 indicates that AW may have some problems paying its short term obligations.
AW has a Quick ratio (0.84) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.84 |
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%.
The earnings per share for AW have been decreasing by -30.60% on average. This is quite bad
Looking at the last year, AW shows a decrease in Revenue. The Revenue has decreased by -2.34% in the last year.
AW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.06% yearly.
EPS 1Y (TTM)-50.72%
EPS 3Y-30.6%
EPS 5YN/A
EPS Q2Q%178.52%
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y6.06%
Revenue growth 5YN/A
Sales Q2Q%-6.31%
3.2 Future
Based on estimates for the next years, AW will show a very strong growth in Earnings Per Share. The EPS will grow by 75.33% on average per year.
AW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.14% yearly.
EPS Next Y375.46%
EPS Next 2Y118.29%
EPS Next 3Y75.33%
EPS Next 5YN/A
Revenue Next Year1.8%
Revenue Next 2Y3.02%
Revenue Next 3Y3.14%
Revenue Next 5YN/A
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 accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 32.05 indicates a quite expensive valuation of AW.
AW's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.46. AW is valued slightly more expensive when compared to this.
AW is valuated correctly with a Price/Forward Earnings ratio of 15.90.
72.22% of the companies in the same industry are more expensive than AW, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.10, AW is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.05 | ||
| Fwd PE | 15.9 |
4.2 Price Multiples
AW's Enterprise Value to EBITDA is on the same level as the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as AW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.15 | ||
| EV/EBITDA | 18.57 |
4.3 Compensation for Growth
AW's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of AW may justify a higher PE ratio.
A more expensive valuation may be justified as AW's earnings are expected to grow with 75.33% in the coming years.
PEG (NY)0.09
PEG (5Y)N/A
EPS Next 2Y118.29%
EPS Next 3Y75.33%
5. Dividend
5.1 Amount
AW has a Yearly Dividend Yield of 5.14%, which is a nice return.
AW's Dividend Yield is rather good when compared to the industry average which is at 4.21. AW pays more dividend than 83.33% of the companies in the same industry.
AW's Dividend Yield is rather good when compared to the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.14% |
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 Years1
Div Non Decr Years1
5.3 Sustainability
AW pays out 122.53% of its income as dividend. This is not a sustainable payout ratio.
DP122.53%
EPS Next 2Y118.29%
EPS Next 3Y75.33%
TSX:AW (12/5/2025, 7:00:00 PM)
37.5
-0.05 (-0.13%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners7.94%
Inst Owner ChangeN/A
Ins Owners37.73%
Ins Owner ChangeN/A
Market Cap900.00M
Revenue(TTM)294.31M
Net Income(TTM)28.19M
Analysts42.22
Price Target42.84 (14.24%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.14% |
Yearly Dividend1.18
Dividend Growth(5Y)N/A
DP122.53%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)9.09%
Min EPS beat(2)-9.61%
Max EPS beat(2)27.79%
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)0
Avg Revenue beat(2)-2.47%
Min Revenue beat(2)-2.7%
Max Revenue beat(2)-2.23%
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)1.2%
PT rev (3m)1.2%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-9.29%
EPS NY rev (1m)4.34%
EPS NY rev (3m)4.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.03%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)-0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 32.05 | ||
| Fwd PE | 15.9 | ||
| P/S | 3.06 | ||
| P/FCF | 25.15 | ||
| P/OCF | 23.28 | ||
| P/B | 4.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.57 |
EPS(TTM)1.17
EY3.12%
EPS(NY)2.36
Fwd EY6.29%
FCF(TTM)1.49
FCFY3.98%
OCF(TTM)1.61
OCFY4.3%
SpS12.26
BVpS8.99
TBVpS-11.59
PEG (NY)0.09
PEG (5Y)N/A
Graham Number15.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.27% | ||
| ROE | 13.07% | ||
| ROCE | 7.99% | ||
| ROIC | 4.96% | ||
| ROICexc | 4.99% | ||
| ROICexgc | 8.92% | ||
| OM | 30.63% | ||
| PM (TTM) | 9.58% | ||
| GM | 98.04% | ||
| FCFM | 12.16% |
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
ROICexgc growth 3Y16.71%
ROICexgc 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 | 4.02 | ||
| Debt/FCF | 25.25 | ||
| Debt/EBITDA | 8.97 | ||
| Cap/Depr | 43.02% | ||
| Cap/Sales | 0.97% | ||
| Interest Coverage | 7.02 | ||
| Cash Conversion | 39.94% | ||
| Profit Quality | 126.96% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 0.76 |
F-Score5
WACC5.01%
ROIC/WACC0.99
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%178.52%
EPS Next Y375.46%
EPS Next 2Y118.29%
EPS Next 3Y75.33%
EPS Next 5YN/A
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y6.06%
Revenue growth 5YN/A
Sales Q2Q%-6.31%
Revenue Next Year1.8%
Revenue Next 2Y3.02%
Revenue Next 3Y3.14%
Revenue Next 5YN/A
EBIT growth 1Y22.47%
EBIT growth 3Y9.87%
EBIT growth 5YN/A
EBIT Next Year124.01%
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
A&W FOOD SERVICES OF CANADA / AW.CA FAQ
Can you provide the ChartMill fundamental rating for A&W FOOD SERVICES OF CANADA?
ChartMill assigns a fundamental rating of 4 / 10 to AW.CA.
What is the valuation status for AW stock?
ChartMill assigns a valuation rating of 5 / 10 to A&W FOOD SERVICES OF CANADA (AW.CA). This can be considered as Fairly Valued.
How profitable is A&W FOOD SERVICES OF CANADA (AW.CA) stock?
A&W FOOD SERVICES OF CANADA (AW.CA) has a profitability rating of 6 / 10.
What is the valuation of A&W FOOD SERVICES OF CANADA based on its PE and PB ratios?
The Price/Earnings (PE) ratio for A&W FOOD SERVICES OF CANADA (AW.CA) is 32.05 and the Price/Book (PB) ratio is 4.17.
Is the dividend of A&W FOOD SERVICES OF CANADA sustainable?
The dividend rating of A&W FOOD SERVICES OF CANADA (AW.CA) is 4 / 10 and the dividend payout ratio is 122.53%.