A&W FOOD SERVICES OF CANADA (AW.CA) Stock Fundamental Analysis
Canada - TSX:AW - CA0002251027 - Common Stock
37.21 CAD
+0.35 (+0.95%)
AW gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 16 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
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 (1.40%) is comparable to the rest of the industry.
AW's Return On Equity of 8.21% is in line compared to the rest of the industry. AW outperforms 50.00% of its industry peers.
The Return On Invested Capital of AW (3.78%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for AW is below the industry average of 6.47%.
The last Return On Invested Capital (3.78%) for AW is above the 3 year average (2.73%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.4% | ||
| ROE | 8.21% | ||
| ROIC | 3.78% |
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 (5.75%) is better than 62.50% of its industry peers.
In the last couple of years the Profit Margin of AW has declined.
AW has a better Operating Margin (22.70%) than 75.00% of its industry peers.
AW's Operating Margin has improved in the last couple of years.
AW has a Gross Margin of 93.47%. This is amongst the best in the industry. AW outperforms 93.75% of its industry peers.
In the last couple of years the Gross Margin of AW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.7% | ||
| PM (TTM) | 5.75% | ||
| GM | 93.47% |
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.
AW has about the same amout of shares outstanding than it did 1 year ago.
AW has a worse debt/assets ratio than last year.
2.2 Solvency
AW has an Altman-Z score of 0.69. This is a bad value and indicates that AW is not financially healthy and even has some risk of bankruptcy.
AW has a Altman-Z score of 0.69. This is in the lower half of the industry: AW underperforms 62.50% of its industry peers.
AW has a debt to FCF ratio of 19.79. This is a negative value and a sign of low solvency as AW would need 19.79 years to pay back of all of its debts.
The Debt to FCF ratio of AW (19.79) is comparable to the rest of the industry.
AW has a Debt/Equity ratio of 4.12. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 4.12, AW is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.12 | ||
| Debt/FCF | 19.79 | ||
| Altman-Z | 0.69 |
ROIC/WACC0.75
WACC5.02%
2.3 Liquidity
AW has a Current Ratio of 0.84. This is a bad value and indicates that AW is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.84, AW perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
AW has a Quick Ratio of 0.84. This is a bad value and indicates that AW is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of AW (0.79) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.79 |
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.
The Revenue has decreased by -2.34% in the past 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%43.06%
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y6.06%
Revenue growth 5YN/A
Sales Q2Q%6.93%
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 125.56% on average per year.
The Revenue is expected to grow by 3.53% on average over the next years.
EPS Next Y355.7%
EPS Next 2Y125.56%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year1.93%
Revenue Next 2Y3.53%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
Based on the Price/Earnings ratio of 52.41, the valuation of AW can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of AW is on the same level as its industry peers.
AW is valuated expensively when we compare the Price/Earnings ratio to 27.34, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 14.78 indicates a correct valuation of AW.
75.00% of the companies in the same industry are more expensive than AW, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of AW to the average of the S&P500 Index (22.86), we can say AW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 52.41 | ||
| Fwd PE | 14.78 |
4.2 Price Multiples
AW's Enterprise Value to EBITDA ratio is in line with the industry average.
AW's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.66 | ||
| EV/EBITDA | 24 |
4.3 Compensation for Growth
The 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 AW's earnings are expected to grow with 125.56% in the coming years.
PEG (NY)0.15
PEG (5Y)N/A
EPS Next 2Y125.56%
EPS Next 3YN/A
5. Dividend
5.1 Amount
AW has a Yearly Dividend Yield of 5.21%, which is a nice return.
AW's Dividend Yield is rather good when compared to the industry average which is at 4.32. AW pays more dividend than 81.25% of the companies in the same industry.
AW's Dividend Yield is rather good when compared to the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.21% |
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 150.73% of its income as dividend. This is not a sustainable payout ratio.
DP150.73%
EPS Next 2Y125.56%
EPS Next 3YN/A
TSX:AW (10/10/2025, 7:00:00 PM)
37.21
+0.35 (+0.95%)
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 Cap893.04M
Analysts42.22
Price Target42.33 (13.76%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.21% |
Yearly Dividend1.18
Dividend Growth(5Y)N/A
DP150.73%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-24.58%
Min EPS beat(2)-32.86%
Max EPS beat(2)-16.3%
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)-2.31%
Min Revenue beat(2)-2.38%
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)0%
PT rev (3m)18.57%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)-11.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-12.16%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 52.41 | ||
| Fwd PE | 14.78 | ||
| P/S | 2.99 | ||
| P/FCF | 19.66 | ||
| P/OCF | 18.44 | ||
| P/B | 4.26 | ||
| P/tB | N/A | ||
| EV/EBITDA | 24 |
EPS(TTM)0.71
EY1.91%
EPS(NY)2.52
Fwd EY6.77%
FCF(TTM)1.89
FCFY5.09%
OCF(TTM)2.02
OCFY5.42%
SpS12.46
BVpS8.73
TBVpS-11.87
PEG (NY)0.15
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.4% | ||
| ROE | 8.21% | ||
| ROCE | 6.09% | ||
| ROIC | 3.78% | ||
| ROICexc | 3.79% | ||
| ROICexgc | 6.82% | ||
| OM | 22.7% | ||
| PM (TTM) | 5.75% | ||
| GM | 93.47% | ||
| FCFM | 15.19% |
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
ROICexcg growth 3Y16.71%
ROICexcg 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-Score4
Asset Turnover0.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.12 | ||
| Debt/FCF | 19.79 | ||
| Debt/EBITDA | 11.58 | ||
| Cap/Depr | 45.21% | ||
| Cap/Sales | 1.01% | ||
| Interest Coverage | 7.21 | ||
| Cash Conversion | 64.95% | ||
| Profit Quality | 264.23% | ||
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.79 | ||
| Altman-Z | 0.69 |
F-Score4
WACC5.02%
ROIC/WACC0.75
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%43.06%
EPS Next Y355.7%
EPS Next 2Y125.56%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y6.06%
Revenue growth 5YN/A
Sales Q2Q%6.93%
Revenue Next Year1.93%
Revenue Next 2Y3.53%
Revenue Next 3YN/A
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