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SNC-LAVALIN GROUP INC (SNC.CA) Stock Fundamental Analysis

TSX:SNC - Toronto Stock Exchange - CA78460T1057 - Common Stock - Currency: CAD

43.42  +0.55 (+1.28%)

Fundamental Rating

3

Taking everything into account, SNC scores 3 out of 10 in our fundamental rating. SNC was compared to 8 industry peers in the Construction & Engineering industry. Both the profitability and financial health of SNC have multiple concerns. SNC is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

SNC had positive earnings in the past year.
SNC had a negative operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: SNC reported negative net income in multiple years.
In multiple years SNC reported negative operating cash flow during the last 5 years.
SNC.CA Yearly Net Income VS EBIT VS OCF VS FCFSNC.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 0 500M -500M -1B

1.2 Ratios

The Return On Assets of SNC (0.76%) is worse than 66.67% of its industry peers.
The Return On Equity of SNC (2.57%) is worse than 66.67% of its industry peers.
SNC has a Return On Invested Capital (3.90%) which is in line with its industry peers.
Industry RankSector Rank
ROA 0.76%
ROE 2.57%
ROIC 3.9%
ROA(3y)-0.83%
ROA(5y)-1.97%
ROE(3y)-5%
ROE(5y)-8.45%
ROIC(3y)N/A
ROIC(5y)N/A
SNC.CA Yearly ROA, ROE, ROICSNC.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 0 20 -20

1.3 Margins

SNC has a Profit Margin of 0.95%. This is in the lower half of the industry: SNC underperforms 66.67% of its industry peers.
SNC's Profit Margin has declined in the last couple of years.
SNC's Operating Margin of 3.79% is fine compared to the rest of the industry. SNC outperforms 66.67% of its industry peers.
In the last couple of years the Operating Margin of SNC has declined.
The Gross Margin of SNC (6.55%) is worse than 77.78% of its industry peers.
SNC's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 3.79%
PM (TTM) 0.95%
GM 6.55%
OM growth 3Y37.65%
OM growth 5Y-15.93%
PM growth 3Y-66.54%
PM growth 5Y-49.9%
GM growth 3Y13.54%
GM growth 5Y-10.11%
SNC.CA Yearly Profit, Operating, Gross MarginsSNC.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 0 5 -5 10 -10

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1

2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SNC is destroying value.
The number of shares outstanding for SNC remains at a similar level compared to 1 year ago.
SNC has a worse debt/assets ratio than last year.
SNC.CA Yearly Shares OutstandingSNC.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 50M 100M 150M
SNC.CA Yearly Total Debt VS Total AssetsSNC.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2B 4B 6B 8B 10B

2.2 Solvency

Based on the Altman-Z score of 1.67, we must say that SNC is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.67, SNC is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
A Debt/Equity ratio of 0.62 indicates that SNC is somewhat dependend on debt financing.
SNC has a better Debt to Equity ratio (0.62) than 66.67% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.62
Debt/FCF N/A
Altman-Z 1.67
ROIC/WACC0.5
WACC7.77%
SNC.CA Yearly LT Debt VS Equity VS FCFSNC.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 0 1B 2B 3B 4B 5B

2.3 Liquidity

SNC has a Current Ratio of 0.85. This is a bad value and indicates that SNC is not financially healthy enough and could expect problems in meeting its short term obligations.
SNC has a Current ratio of 0.85. This is in the lower half of the industry: SNC underperforms 66.67% of its industry peers.
A Quick Ratio of 0.85 indicates that SNC may have some problems paying its short term obligations.
SNC has a Quick ratio of 0.85. This is in the lower half of the industry: SNC underperforms 66.67% of its industry peers.
Industry RankSector Rank
Current Ratio 0.85
Quick Ratio 0.85
SNC.CA Yearly Current Assets VS Current LiabilitesSNC.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 1B 2B 3B 4B 5B

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5

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 37.70% over the past year.
Measured over the past years, SNC shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -21.30% on average per year.
The Revenue has been growing slightly by 5.73% in the past year.
SNC shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -4.16% yearly.
EPS 1Y (TTM)37.7%
EPS 3Y-70.1%
EPS 5Y-21.3%
EPS Q2Q%32.26%
Revenue 1Y (TTM)5.73%
Revenue growth 3Y-7.43%
Revenue growth 5Y-4.16%
Sales Q2Q%13.9%

3.2 Future

Based on estimates for the next years, SNC will show a very strong growth in Earnings Per Share. The EPS will grow by 45.78% on average per year.
SNC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.14% yearly.
EPS Next Y132.51%
EPS Next 2Y74.39%
EPS Next 3Y58.64%
EPS Next 5Y45.78%
Revenue Next Year7.37%
Revenue Next 2Y4.45%
Revenue Next 3Y4.22%
Revenue Next 5Y3.14%

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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
SNC.CA Yearly Revenue VS EstimatesSNC.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2B 4B 6B 8B 10B
SNC.CA Yearly EPS VS EstimatesSNC.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 2 -2 4

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3

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 51.69, SNC can be considered very expensive at the moment.
Based on the Price/Earnings ratio, SNC is valued a bit more expensive than 66.67% of the companies in the same industry.
SNC's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.19.
With a Price/Forward Earnings ratio of 22.31, SNC is valued on the expensive side.
SNC's Price/Forward Earnings ratio is in line with the industry average.
SNC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.13, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 51.69
Fwd PE 22.31
SNC.CA Price Earnings VS Forward Price EarningsSNC.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as SNC.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 17.33
SNC.CA Per share dataSNC.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 10 20 30 40

4.3 Compensation for Growth

SNC'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 SNC's earnings are expected to grow with 58.64% in the coming years.
PEG (NY)0.39
PEG (5Y)N/A
EPS Next 2Y74.39%
EPS Next 3Y58.64%

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2

5. Dividend

5.1 Amount

With a yearly dividend of 0.18%, SNC is not a good candidate for dividend investing.
SNC's Dividend Yield is slightly below the industry average, which is at 1.72.
With a Dividend Yield of 0.18, SNC pays less dividend than the S&P500 average, which is at 2.40.
Industry RankSector Rank
Dividend Yield 0.18%

5.2 History

The dividend of SNC decreases each year by -40.74%.
SNC has been paying a dividend for over 5 years, so it has already some track record.
SNC has decreased its dividend in the last 3 years.
Dividend Growth(5Y)-40.74%
Div Incr Years0
Div Non Decr Years2
SNC.CA Yearly Dividends per shareSNC.CA Yearly Dividends per shareYearly Dividends per share 2017 2018 2019 2020 2021 2022 2023 0.1 0.2 0.3 0.4 0.5

5.3 Sustainability

SNC pays out 18.56% of its income as dividend. This is a sustainable payout ratio.
DP18.56%
EPS Next 2Y74.39%
EPS Next 3Y58.64%
SNC.CA Yearly Income VS Free CF VS DividendSNC.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 0 500M -500M -1B
SNC.CA Dividend Payout.SNC.CA Dividend Payout, showing the Payout Ratio.SNC.CA Dividend Payout.PayoutRetained Earnings

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SNC-LAVALIN GROUP INC

TSX:SNC (10/6/2023, 7:00:00 PM)

43.42

+0.55 (+1.28%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryConstruction & Engineering
Earnings (Last)N/A N/A
Earnings (Next)N/A N/A
Inst Owners29.67%
Inst Owner ChangeN/A
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap7.62B
Analysts77.33
Price Target48.13 (10.85%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 0.18%
Yearly Dividend0.08
Dividend Growth(5Y)-40.74%
DP18.56%
Div Incr Years0
Div Non Decr Years2
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)25.77%
Min EPS beat(2)17.35%
Max EPS beat(2)34.2%
EPS beat(4)2
Avg EPS beat(4)-36.36%
Min EPS beat(4)-186%
Max EPS beat(4)34.2%
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)2
Avg Revenue beat(2)9.36%
Min Revenue beat(2)6.53%
Max Revenue beat(2)12.19%
Revenue beat(4)3
Avg Revenue beat(4)4.98%
Min Revenue beat(4)-3.7%
Max Revenue beat(4)12.19%
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)15.08%
EPS NQ rev (1m)0.56%
EPS NQ rev (3m)-2.41%
EPS NY rev (1m)0%
EPS NY rev (3m)5.37%
Revenue NQ rev (1m)-0.25%
Revenue NQ rev (3m)7.14%
Revenue NY rev (1m)0%
Revenue NY rev (3m)8.5%
Valuation
Industry RankSector Rank
PE 51.69
Fwd PE 22.31
P/S 0.96
P/FCF N/A
P/OCF N/A
P/B 2.59
P/tB N/A
EV/EBITDA 17.33
EPS(TTM)0.84
EY1.93%
EPS(NY)1.95
Fwd EY4.48%
FCF(TTM)-1.78
FCFYN/A
OCF(TTM)-1.12
OCFYN/A
SpS45.25
BVpS16.8
TBVpS-4.32
PEG (NY)0.39
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 0.76%
ROE 2.57%
ROCE 5.42%
ROIC 3.9%
ROICexc 4.52%
ROICexgc 20.04%
OM 3.79%
PM (TTM) 0.95%
GM 6.55%
FCFM N/A
ROA(3y)-0.83%
ROA(5y)-1.97%
ROE(3y)-5%
ROE(5y)-8.45%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y45.32%
ROICexcg growth 5Y-20.73%
ROICexc growth 3Y35.29%
ROICexc growth 5Y-10.11%
OM growth 3Y37.65%
OM growth 5Y-15.93%
PM growth 3Y-66.54%
PM growth 5Y-49.9%
GM growth 3Y13.54%
GM growth 5Y-10.11%
F-Score4
Asset Turnover0.79
Health
Industry RankSector Rank
Debt/Equity 0.62
Debt/FCF N/A
Debt/EBITDA 3.36
Cap/Depr 47.8%
Cap/Sales 1.47%
Interest Coverage 1.87
Cash Conversion N/A
Profit Quality N/A
Current Ratio 0.85
Quick Ratio 0.85
Altman-Z 1.67
F-Score4
WACC7.77%
ROIC/WACC0.5
Cap/Depr(3y)34.75%
Cap/Depr(5y)36.36%
Cap/Sales(3y)1.33%
Cap/Sales(5y)1.36%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)37.7%
EPS 3Y-70.1%
EPS 5Y-21.3%
EPS Q2Q%32.26%
EPS Next Y132.51%
EPS Next 2Y74.39%
EPS Next 3Y58.64%
EPS Next 5Y45.78%
Revenue 1Y (TTM)5.73%
Revenue growth 3Y-7.43%
Revenue growth 5Y-4.16%
Sales Q2Q%13.9%
Revenue Next Year7.37%
Revenue Next 2Y4.45%
Revenue Next 3Y4.22%
Revenue Next 5Y3.14%
EBIT growth 1Y64.99%
EBIT growth 3Y27.43%
EBIT growth 5Y-19.42%
EBIT Next Year95.2%
EBIT Next 3Y37.08%
EBIT Next 5Y24.55%
FCF growth 1Y-1717.51%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-476.46%
OCF growth 3YN/A
OCF growth 5YN/A