A&W FOOD SERVICES OF CANADA (AW.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:AW - CA0002251027 - Common Stock
36.1 CAD
+0.08 (+0.22%)
Taking everything into account, AW scores 4 out of 10 in our fundamental rating. AW was compared to 19 industry peers in the Hotels, Restaurants & Leisure industry. AW has a medium profitability rating, but doesn't score so well on its financial health evaluation. AW is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- AW had positive earnings in the past year.
- In the past year AW had a positive cash flow from operations.
1.2 Ratios
- The Return On Assets of AW (2.27%) is comparable to the rest of the industry.
- The Return On Equity of AW (13.07%) is better than 84.21% of its industry peers.
- AW has a Return On Invested Capital (4.96%) which is comparable to the rest of the industry.
- Measured over the past 3 years, the Average Return On Invested Capital for AW is significantly below the industry average of 8.63%.
- 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
- AW has a better Profit Margin (9.58%) than 63.16% of its industry peers.
- In the last couple of years the Profit Margin of AW has declined.
- With an excellent Operating Margin value of 30.63%, AW belongs to the best of the industry, outperforming 84.21% of the companies in the same industry.
- AW's Operating Margin has improved in the last couple of years.
- AW's Gross Margin of 98.04% is amongst the best of the industry. AW outperforms 94.74% of its industry peers.
- AW's Gross Margin has improved in the last couple of years.
| 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
- AW has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, AW has about the same amount of shares outstanding.
- The debt/assets ratio for AW is higher compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.74, we must say that AW is in the distress zone and has some risk of bankruptcy.
- The Altman-Z score of AW (0.74) 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 (25.25) which is comparable to the rest of the industry.
- 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 perfoms like the industry average, outperforming 42.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.02 | ||
| Debt/FCF | 25.25 | ||
| Altman-Z | 0.74 |
ROIC/WACC1.02
WACC4.88%
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 in line with its industry peers.
- A Quick Ratio of 0.84 indicates that AW may have some problems paying its short term obligations.
- AW has a Quick ratio of 0.84. This is comparable to the rest of the industry: AW outperforms 57.89% of 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%.
- AW shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -30.60% yearly.
- Looking at the last year, AW shows a decrease in Revenue. The Revenue has decreased by -2.34% in the last year.
- The Revenue has been growing slightly by 6.06% on average over the past years.
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
- AW is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 75.33% yearly.
- The Revenue is expected to grow by 3.14% on average over the next years.
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
- AW is valuated quite expensively with a Price/Earnings ratio of 30.85.
- AW's Price/Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 28.82, AW is valued at the same level.
- With a Price/Forward Earnings ratio of 15.31, AW is valued correctly.
- AW's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. AW is cheaper than 73.68% of the companies in the same industry.
- AW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.85 | ||
| Fwd PE | 15.31 |
4.2 Price Multiples
- AW's Enterprise Value to EBITDA ratio is in line with the industry average.
- The rest of the industry has a similar Price/Free Cash Flow ratio as AW.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.21 | ||
| EV/EBITDA | 18.21 |
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.
- AW's earnings are expected to grow with 75.33% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.08
PEG (5Y)N/A
EPS Next 2Y118.29%
EPS Next 3Y75.33%
5. Dividend
5.1 Amount
- AW has a Yearly Dividend Yield of 5.23%, which is a nice return.
- AW's Dividend Yield is rather good when compared to the industry average which is at 2.40. AW pays more dividend than 84.21% of the companies in the same industry.
- AW's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.23% |
5.2 History
- AW does not have a reliable dividend history as it only pays dividend since a couple or years.
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%
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.
Can you provide the valuation status for A&W FOOD SERVICES OF CANADA?
ChartMill assigns a valuation rating of 5 / 10 to A&W FOOD SERVICES OF CANADA (AW.CA). This can be considered as Fairly Valued.
What is the profitability of AW stock?
A&W FOOD SERVICES OF CANADA (AW.CA) has a profitability rating of 6 / 10.
Can you provide the financial health for AW stock?
The financial health rating of A&W FOOD SERVICES OF CANADA (AW.CA) is 2 / 10.
Can you provide the expected EPS growth for AW stock?
The Earnings per Share (EPS) of A&W FOOD SERVICES OF CANADA (AW.CA) is expected to grow by 375.46% in the next year.