Aecon Group
Market Cap
CA$968.2m
Last Updated
2020/11/23 23:37 UTC
Data Sources
Company Financials +
Executive Summary
Aecon Group Inc. and its subsidiaries provide construction and infrastructure development services to private and public sector clients in Canada, the United States, and internationally. More Details
Rewards
Risk Analysis
Earnings are forecast to decline by an average of 1.8% per year for the next 3 years
Snowflake Analysis
Undervalued with excellent balance sheet and pays a dividend.
Similar Companies
Share Price & News
How has Aecon Group's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: ARE is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: ARE's weekly volatility (3%) has been stable over the past year.
Market Performance
7 Day Return
2.7%
ARE
3.1%
CA Construction
0.7%
CA Market
1 Year Return
-11.9%
ARE
4.5%
CA Construction
-2.0%
CA Market
Return vs Industry: ARE underperformed the Canadian Construction industry which returned 5% over the past year.
Return vs Market: ARE underperformed the Canadian Market which returned -1.8% over the past year.
Shareholder returns
| ARE | Industry | Market | |
|---|---|---|---|
| 7 Day | 2.7% | 3.1% | 0.7% |
| 30 Day | 13.5% | 4.9% | 5.3% |
| 90 Day | 9.1% | 4.2% | 4.0% |
| 1 Year | -8.1%-11.9% | 6.3%4.5% | 1.6%-2.0% |
| 3 Year | -8.6%-17.4% | -4.1%-9.0% | 10.2%-0.5% |
| 5 Year | 33.9%14.3% | 28.9%15.8% | 44.5%22.3% |
Long-Term Price Volatility Vs. Market
How volatile is Aecon Group's share price compared to the market and industry in the last 5 years?
Simply Wall St News
6 days ago | Simply Wall St
Is Aecon Group (TSE:ARE) A Risky Investment?2 weeks ago | Simply Wall St
Does Aecon Group's (TSE:ARE) Statutory Profit Adequately Reflect Its Underlying Profit?1 month ago | Simply Wall St
Is It Time To Consider Buying Aecon Group Inc. (TSE:ARE)?Valuation
Is Aecon Group undervalued compared to its fair value and its price relative to the market?
24.4%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: ARE (CA$15.97) is trading below our estimate of fair value (CA$21.33)
Significantly Below Fair Value: ARE is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: ARE is good value based on its PE Ratio (12.6x) compared to the CA Construction industry average (23.2x).
PE vs Market: ARE is good value based on its PE Ratio (12.6x) compared to the Canadian market (15x).
Price to Earnings Growth Ratio
PEG Ratio: ARE's earnings are forecast to decline next year, so we can't calculate its PEG ratio.
Price to Book Ratio
PB vs Industry: ARE is good value based on its PB Ratio (1.1x) compared to the CA Construction industry average (1.9x).
Next Steps
Future Growth
How is Aecon Group forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?
-1.8%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ARE's earnings are forecast to decline over the next 3 years (-1.8% per year).
Earnings vs Market: ARE's earnings are forecast to decline over the next 3 years (-1.8% per year).
High Growth Earnings: ARE's earnings are forecast to decline over the next 3 years.
Revenue vs Market: ARE's revenue (6.1% per year) is forecast to grow slower than the Canadian market (6.1% per year).
High Growth Revenue: ARE's revenue (6.1% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: ARE's Return on Equity is forecast to be low in 3 years time (7.4%).
Next Steps
Past Performance
How has Aecon Group performed over the past 5 years?
5.4%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ARE has high quality earnings.
Growing Profit Margin: ARE's current net profit margins (2.2%) are lower than last year (2.3%).
Past Earnings Growth Analysis
Earnings Trend: ARE's earnings have grown by 5.4% per year over the past 5 years.
Accelerating Growth: ARE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: ARE had negative earnings growth (-5.2%) over the past year, making it difficult to compare to the Construction industry average (-14.4%).
Return on Equity
High ROE: ARE's Return on Equity (8.8%) is considered low.
Next Steps
Financial Health
How is Aecon Group's financial position?
Financial Position Analysis
Short Term Liabilities: ARE's short term assets (CA$2.3B) exceed its short term liabilities (CA$1.6B).
Long Term Liabilities: ARE's short term assets (CA$2.3B) exceed its long term liabilities (CA$916.9M).
Debt to Equity History and Analysis
Debt Level: ARE's debt to equity ratio (67.1%) is considered high.
Reducing Debt: ARE's debt to equity ratio has reduced from 78.2% to 67.1% over the past 5 years.
Debt Coverage: ARE's debt is well covered by operating cash flow (57.8%).
Interest Coverage: ARE's interest payments on its debt are well covered by EBIT (4.6x coverage).
Balance Sheet
Next Steps
Dividend
What is Aecon Group current dividend yield, its reliability and sustainability?
3.96%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: ARE's dividend (4.01%) is higher than the bottom 25% of dividend payers in the Canadian market (1.66%).
High Dividend: ARE's dividend (4.01%) is low compared to the top 25% of dividend payers in the Canadian market (5.45%).
Stability and Growth of Payments
Stable Dividend: ARE's dividends per share have been stable in the past 10 years.
Growing Dividend: ARE's dividend payments have increased over the past 10 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonably low payout ratio (49.4%), ARE's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: ARE's dividends in 3 years are forecast to be well covered by earnings (44.2% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
3.9yrs
Average management tenure
CEO
Jean-Louis Servranckx (59 yo)
2.17yrs
Tenure
CA$4,285,982
Compensation
Mr. Jean-Louis Servranckx has been President and Chief Executive Officer of Aecon Group Inc. since September 4, 2018 and serves as its Director since October 25, 2018.
CEO Compensation Analysis
Compensation vs Market: Jean-Louis's total compensation ($USD3.28M) is above average for companies of similar size in the Canadian market ($USD1.48M).
Compensation vs Earnings: Jean-Louis's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 2.17yrs | CA$4.29m | 0.013% CA$ 122.6k | |
| Executive VP & CFO | 11yrs | CA$2.30m | 0.039% CA$ 377.6k | |
| Executive VP | 3.33yrs | CA$1.56m | 0.0036% CA$ 34.6k | |
| Executive VP of Industrial & Chief Safety Officer | 5.17yrs | CA$1.32m | no data | |
| Senior Vice President of Corporate Development & Investor Relations | 2.83yrs | no data | 0.0038% CA$ 37.0k | |
| Senior Vice President of Human Resources | 2.42yrs | no data | no data | |
| Executive VP & President of Concessions | 1.83yrs | CA$1.58m | no data | |
| Senior Vice President of Strategic Business Development | 8.83yrs | CA$696.64k | no data | |
| Senior Vice President of Industrial East & West | 9.83yrs | no data | no data | |
| Senior Vice President of Finance | no data | no data | 0.0031% CA$ 30.2k | |
| Senior Vice President of Major Projects - Civil West | 3.92yrs | no data | no data | |
| Senior VP & Executive Lead of Civil West | 3.92yrs | no data | no data |
3.9yrs
Average Tenure
Experienced Management: ARE's management team is considered experienced (3.9 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 2.17yrs | CA$4.29m | 0.013% CA$ 122.6k | |
| Independent Director | 7.42yrs | CA$211.15k | 0.013% CA$ 129.4k | |
| Independent Lead Director | 0.83yr | CA$233.94k | 0.15% CA$ 1.5m | |
| Independent Director | 3.42yrs | CA$208.15k | no data | |
| Non-Executive Chairman | 2.17yrs | CA$4.16m | no data | |
| Independent Director | 11.58yrs | CA$222.15k | 1.09% CA$ 10.5m | |
| Independent Director | 4.42yrs | CA$232.65k | 0.0035% CA$ 34.3k | |
| Independent Director | 1.42yrs | CA$168.15k | 0.0045% CA$ 43.7k | |
| Independent Corporate Director | 7.33yrs | CA$269.77k | 0.017% CA$ 161.7k | |
| Independent Director | 1.42yrs | CA$172.25k | 0.0049% CA$ 47.8k |
2.8yrs
Average Tenure
65yo
Average Age
Experienced Board: ARE's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Aecon Group Inc.'s company bio, employee growth, exchange listings and data sources
Key Information
- Name: Aecon Group Inc.
- Ticker: ARE
- Exchange: TSX
- Founded: 1877
- Industry: Construction and Engineering
- Sector: Capital Goods
- Market Cap: CA$968.224m
- Shares outstanding: 59.88m
- Website: https://www.aecon.com
Number of Employees
Location
- Aecon Group Inc.
- 20 Carlson Court
- Suite 105
- Toronto
- Ontario
- M9W 7K6
- Canada
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| ARE | TSX (The Toronto Stock Exchange) | Yes | Common Shares | CA | CAD | Jan 1988 |
| 2AE | DB (Deutsche Boerse AG) | Yes | Common Shares | DE | EUR | Jan 1988 |
| AEGX.F | OTCPK (Pink Sheets LLC) | Yes | Common Shares | US | USD | Jan 1988 |
Biography
Aecon Group Inc. and its subsidiaries provide construction and infrastructure development services to private and public sector clients in Canada, the United States, and internationally. It operates throug...
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/11/23 23:37 |
| End of Day Share Price | 2020/11/23 00:00 |
| Earnings | 2020/09/30 |
| Annual Earnings | 2019/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.