A&W FOOD SERVICES OF CANADA (AW.CA) Stock Fundamental Analysis
TSX:AW - Toronto Stock Exchange - CA0002251027 - Common Stock - Currency: CAD
Overall AW gets a fundamental rating of 4 out of 10. We evaluated AW against 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 has a decent growth rate and is not valued too expensively.
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
AW has a Return On Assets (1.14%) which is comparable to the rest of the industry.
With a decent Return On Equity value of 8.38%, AW is doing good in the industry, outperforming 63.16% of the companies in the same industry.
AW's Return On Invested Capital of 3.16% is in line compared to the rest of the industry. AW outperforms 52.63% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AW is below the industry average of 7.05%.
The last Return On Invested Capital (3.16%) for AW is above the 3 year average (2.73%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.14% | ||
| ROE | 8.38% | ||
| ROIC | 3.16% |
ROA(3y)2.52%
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)2.73%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 4.58%, AW is in the better half of the industry, outperforming 63.16% of the companies in the same industry.
In the last couple of years the Profit Margin of AW has declined.
The Operating Margin of AW (18.43%) is better than 68.42% of its industry peers.
AW's Operating Margin has improved in the last couple of years.
AW has a better Gross Margin (88.98%) than 94.74% of its industry peers.
AW's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.43% | ||
| PM (TTM) | 4.58% | ||
| GM | 88.98% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AW is destroying value.
Compared to 1 year ago, AW has about the same amount of shares outstanding.
Compared to 1 year ago, AW has a worse debt to assets ratio.
2.2 Solvency
AW has an Altman-Z score of 0.59. This is a bad value and indicates that AW is not financially healthy and even has some risk of bankruptcy.
AW's Altman-Z score of 0.59 is in line compared to the rest of the industry. AW outperforms 52.63% of its industry peers.
The Debt to FCF ratio of AW is 19.00, which is on the high side as it means it would take AW, 19.00 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 19.00, AW perfoms like the industry average, outperforming 57.89% of the companies in the same industry.
A Debt/Equity ratio of 5.36 is on the high side and indicates that AW has dependencies on debt financing.
AW has a worse Debt to Equity ratio (5.36) than 63.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.36 | ||
| Debt/FCF | 19 | ||
| Altman-Z | 0.59 |
ROIC/WACC0.73
WACC4.31%
2.3 Liquidity
AW has a Current Ratio of 0.82. 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 (0.82) which is in line with its industry peers.
A Quick Ratio of 0.74 indicates that AW may have some problems paying its short term obligations.
AW has a Quick ratio (0.74) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.74 |
3. Growth
3.1 Past
The earnings per share for AW have decreased strongly by -50.72% in the last year.
The earnings per share for AW have been decreasing by -30.60% on average. This is quite bad
AW shows a decrease in Revenue. In the last year, the revenue decreased by -2.34%.
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%22.27%
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y6.06%
Revenue growth 5YN/A
Sales Q2Q%4%
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 134.38% on average per year.
The Revenue is expected to grow by 5.00% on average over the next years.
EPS Next Y413.96%
EPS Next 2Y134.38%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year4.96%
Revenue Next 2Y5%
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.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 64.52, AW can be considered very expensive at the moment.
AW's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 26.32. AW is valued rather expensively when compared to this.
The Price/Forward Earnings ratio is 13.29, which indicates a correct valuation of AW.
78.95% 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 22.19, AW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.52 | ||
| Fwd PE | 13.29 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AW indicates a somewhat cheap valuation: AW is cheaper than 63.16% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AW indicates a somewhat cheap valuation: AW is cheaper than 63.16% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.33 | ||
| EV/EBITDA | 29.01 |
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.
A more expensive valuation may be justified as AW's earnings are expected to grow with 134.38% in the coming years.
PEG (NY)0.16
PEG (5Y)N/A
EPS Next 2Y134.38%
EPS Next 3YN/A
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.88%, AW is a good candidate for dividend investing.
AW's Dividend Yield is a higher than the industry average which is at 4.54.
Compared to an average S&P500 Dividend Yield of 2.40, AW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.88% |
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 202.07% of its income as dividend. This is not a sustainable payout ratio.
DP202.07%
EPS Next 2Y134.38%
EPS Next 3YN/A
TSX:AW (6/17/2025, 7:00:00 PM)
36.13
-0.43 (-1.18%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners7.67%
Inst Owner ChangeN/A
Ins Owners37.73%
Ins Owner ChangeN/A
Market Cap867.12M
Analysts42.22
Price Target35.7 (-1.19%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.88% |
Yearly Dividend1.18
Dividend Growth(5Y)N/A
DP202.07%
Div Incr Years1
Div Non Decr Years1
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)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
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)-7.89%
EPS NQ rev (1m)-6.45%
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)N/A
Revenue NQ rev (1m)-2.07%
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-8.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 64.52 | ||
| Fwd PE | 13.29 | ||
| P/S | 2.94 | ||
| P/FCF | 18.33 | ||
| P/OCF | 17.37 | ||
| P/B | 5.39 | ||
| P/tB | N/A | ||
| EV/EBITDA | 29.01 |
EPS(TTM)0.56
EY1.55%
EPS(NY)2.72
Fwd EY7.53%
FCF(TTM)1.97
FCFY5.46%
OCF(TTM)2.08
OCFY5.76%
SpS12.28
BVpS6.71
TBVpS-11.93
PEG (NY)0.16
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.14% | ||
| ROE | 8.38% | ||
| ROCE | 5.1% | ||
| ROIC | 3.16% | ||
| ROICexc | 3.2% | ||
| ROICexgc | 5.55% | ||
| OM | 18.43% | ||
| PM (TTM) | 4.58% | ||
| GM | 88.98% | ||
| FCFM | 16.06% |
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 Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.36 | ||
| Debt/FCF | 19 | ||
| Debt/EBITDA | 14.21 | ||
| Cap/Depr | 40.59% | ||
| Cap/Sales | 0.89% | ||
| Interest Coverage | 11.03 | ||
| Cash Conversion | 82.17% | ||
| Profit Quality | 350.47% | ||
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.74 | ||
| Altman-Z | 0.59 |
F-Score4
WACC4.31%
ROIC/WACC0.73
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%22.27%
EPS Next Y413.96%
EPS Next 2Y134.38%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y6.06%
Revenue growth 5YN/A
Sales Q2Q%4%
Revenue Next Year4.96%
Revenue Next 2Y5%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y22.47%
EBIT growth 3Y9.87%
EBIT growth 5YN/A
EBIT Next Year123.43%
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