A&W FOOD SERVICES OF CANADA (AW.CA) Stock Fundamental Analysis
TSX:AW - CA0002251027 - Common Stock
38.7 CAD
+0.54 (+1.42%)
We assign a fundamental rating of 3 out of 10 to AW. AW was compared to 18 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
With a Return On Assets value of 1.40%, AW perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
AW's Return On Equity of 8.21% is fine compared to the rest of the industry. AW outperforms 61.11% of its industry peers.
AW has a Return On Invested Capital of 3.78%. 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 6.35%.
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
AW's Profit Margin of 5.75% is fine compared to the rest of the industry. AW outperforms 66.67% of its industry peers.
In the last couple of years the Profit Margin of AW has declined.
Looking at the Operating Margin, with a value of 22.70%, AW is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
AW's Operating Margin has improved in the last couple of years.
The Gross Margin of AW (93.47%) is better than 88.89% of its industry peers.
AW's Gross Margin has improved in the last couple of years.
| 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.
Compared to 1 year ago, AW has a worse debt to assets ratio.
2.2 Solvency
AW has an Altman-Z score of 0.71. 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 0.71 is in line compared to the rest of the industry. AW outperforms 44.44% 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.
With a Debt to FCF ratio value of 19.79, AW perfoms like the industry average, outperforming 55.56% of the companies in the same industry.
A Debt/Equity ratio of 4.12 is on the high side and indicates that AW has dependencies on debt financing.
AW has a worse Debt to Equity ratio (4.12) than 61.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.12 | ||
| Debt/FCF | 19.79 | ||
| Altman-Z | 0.71 |
ROIC/WACC0.64
WACC5.88%
2.3 Liquidity
A Current Ratio of 0.84 indicates that AW may have some problems paying its short term obligations.
AW's Current ratio of 0.84 is in line compared to the rest of the industry. AW outperforms 50.00% of its industry peers.
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.
AW has a Quick ratio of 0.79. This is comparable to the rest of the industry: AW outperforms 44.44% of its industry peers.
| 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%.
Measured over the past years, AW shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -30.60% on average per year.
The Revenue has decreased by -2.34% in the past 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%43.06%
Revenue 1Y (TTM)-2.34%
Revenue growth 3Y6.06%
Revenue growth 5YN/A
Sales Q2Q%6.93%
3.2 Future
The Earnings Per Share is expected to grow by 125.56% on average over the next years. This is a very strong growth
AW is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.53% yearly.
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 54.51, the valuation of AW can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as AW.
Compared to an average S&P500 Price/Earnings ratio of 27.06, AW is valued quite expensively.
A Price/Forward Earnings ratio of 15.37 indicates a correct valuation of AW.
Based on the Price/Forward Earnings ratio, AW is valued a bit cheaper than 77.78% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.69, AW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.51 | ||
| Fwd PE | 15.37 |
4.2 Price Multiples
AW's Enterprise Value to EBITDA is on the same level as the industry average.
AW's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.45 | ||
| EV/EBITDA | 24.48 |
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 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 5.03%, which is a nice return.
Compared to an average industry Dividend Yield of 4.20, AW pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.41, AW pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.03% |
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
150.73% of the earnings are spent on dividend by AW. This is not a sustainable payout ratio.
DP150.73%
EPS Next 2Y125.56%
EPS Next 3YN/A
TSX:AW (9/5/2025, 7:00:00 PM)
38.7
+0.54 (+1.42%)
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 Cap928.80M
Analysts42.22
Price Target42.33 (9.38%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.03% |
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)18.57%
PT rev (3m)18.57%
EPS NQ rev (1m)-4.1%
EPS NQ rev (3m)N/A
EPS NY rev (1m)-11.34%
EPS NY rev (3m)-11.34%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.89%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 54.51 | ||
| Fwd PE | 15.37 | ||
| P/S | 3.11 | ||
| P/FCF | 20.45 | ||
| P/OCF | 19.18 | ||
| P/B | 4.43 | ||
| P/tB | N/A | ||
| EV/EBITDA | 24.48 |
EPS(TTM)0.71
EY1.83%
EPS(NY)2.52
Fwd EY6.51%
FCF(TTM)1.89
FCFY4.89%
OCF(TTM)2.02
OCFY5.21%
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 | 0.71 |
F-Score4
WACC5.88%
ROIC/WACC0.64
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 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