Aecon Group
Market Cap
CA$1.0b
Last Updated
2020/02/25 23:36 UTC
Data Sources
Company Financials +
Executive Summary
Aecon Group Inc. provides construction and infrastructure development services to private and public sector clients in Canada, the United States, and internationally.
Rewards
Risk Analysis
Snowflake Analysis
Established dividend payer and good value.
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 has not had significant price volatility in the past 3 months.
Market Performance
7 Day Return
-8.8%
ARE
-4.8%
CA Construction
-1.5%
CA Market
1 Year Return
-9.2%
ARE
4.3%
CA Construction
2.5%
CA Market
Return vs Industry: ARE underperformed the Canadian Construction industry which returned 4.3% over the past year.
Return vs Market: ARE underperformed the Canadian Market which returned 2.5% over the past year.
Shareholder returns
| ARE | Industry | Market | |
|---|---|---|---|
| 7 Day | -8.8% | -4.8% | -1.5% |
| 30 Day | -5.3% | -2.3% | -0.7% |
| 90 Day | -9.3% | 9.4% | 1.8% |
| 1 Year | -6.3%-9.2% | 6.0%4.3% | 5.7%2.5% |
| 3 Year | 13.5%3.7% | 9.0%2.5% | 16.8%6.2% |
| 5 Year | 66.3%43.3% | 48.2%31.4% | 32.0%12.8% |
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 Inc. (TSE:ARE) Investing Your Capital Efficiently?2 weeks ago | Simply Wall St
How Good Is Aecon Group Inc. (TSE:ARE), When It Comes To ROE?3 weeks ago | Simply Wall St
Update: Aecon Group (TSE:ARE) Stock Gained 64% In The Last Five YearsValuation
Is Aecon Group undervalued compared to its fair value and its price relative to the market?
20.0%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: ARE (CA$17.14) is trading below our estimate of fair value (CA$20.67)
Significantly Below Fair Value: ARE is trading below fair value, but not by a significant amount.
Price To Earnings Ratio
PE vs Industry: ARE is good value based on its PE Ratio (12.9x) compared to the Construction industry average (17.6x).
PE vs Market: ARE is good value based on its PE Ratio (12.9x) compared to the Canadian market (16x).
Price to Earnings Growth Ratio
PEG Ratio: ARE is poor value based on its PEG Ratio (9.4x)
Price to Book Ratio
PB vs Industry: ARE is good value based on its PB Ratio (1.2x) compared to the CA Construction industry average (2.3x).
Next Steps
Future Growth
How is Aecon Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
1.4%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: ARE's forecast earnings growth (1.4% per year) is below the savings rate (1.4%).
Earnings vs Market: ARE's earnings (1.4% per year) are forecast to grow slower than the Canadian market (11.1% per year).
High Growth Earnings: ARE's earnings are forecast to grow, but not significantly.
Revenue vs Market: ARE's revenue (3.6% per year) is forecast to grow slower than the Canadian market (4.6% per year).
High Growth Revenue: ARE's revenue (3.6% 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 (8.6%).
Next Steps
Past Performance
How has Aecon Group performed over the past 5 years?
6.8%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: ARE has a high level of non-cash earnings.
Growing Profit Margin: ARE's current net profit margins (2.3%) are higher than last year (1.7%).
Past Earnings Growth Analysis
Earnings Trend: ARE's earnings have grown by 6.8% per year over the past 5 years.
Accelerating Growth: ARE's earnings growth over the past year (54.2%) exceeds its 5-year average (6.8% per year).
Earnings vs Industry: ARE earnings growth over the past year (54.2%) exceeded the Construction industry 4.6%.
Return on Equity
High ROE: ARE's Return on Equity (9.4%) is considered low.
Return on Assets
Return on Capital Employed
Next Steps
Financial Health
How is Aecon Group's financial position?
Financial Position Analysis
Short Term Liabilities: ARE's short term assets (CA$2.2B) exceed its short term liabilities (CA$1.4B).
Long Term Liabilities: ARE's short term assets (CA$2.2B) exceed its long term liabilities (CA$910.1M).
Debt to Equity History and Analysis
Debt Level: ARE's debt to equity ratio (80.7%) is considered high.
Reducing Debt: ARE's debt to equity ratio has reduced from 86.2% to 80.7% over the past 5 years.
Debt Coverage: ARE's operating cash flow is negative, therefore debt is not well covered.
Interest Coverage: ARE's interest payments on its debt are well covered by EBIT (4.6x coverage).
Balance Sheet
Inventory Level: ARE has a low level of unsold assets or inventory.
Debt Coverage by Assets: ARE's debt is covered by short term assets (assets are 3.2x debt).
Next Steps
Dividend
What is Aecon Group's current dividend yield, its reliability and sustainability?
3.51%
Current Dividend Yield
Dividend Yield vs Market
Current dividend yield vs market & industry
Notable Dividend: ARE's dividend (3.38%) is higher than the bottom 25% of dividend payers in the Canadian market (2%).
High Dividend: ARE's dividend (3.38%) is low compared to the top 25% of dividend payers in the Canadian market (5.6%).
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 (42.1%), 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 (43.4% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
2.6yrs
Average management tenure
CEO
Jean-Louis Servranckx (58yo)
1.4yrs
Tenure
CA$3,098,907
Compensation
Mr. Jean-Louis Servranckx has been President and Chief Executive Officer of Aecon Group Inc. since September 4, 2018 and serves as its Director since October 25, 2018.
CEO Compensation Analysis
Compensation vs Market: Jean-Louis's total compensation ($USD2.33M) is above average for companies of similar size in the Canadian market ($USD1.60M).
Compensation vs Earnings: Insufficient data to compare Jean-Louis's compensation with company performance.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 1.4yrs | CA$3.10m | 0.012% CA$129.9k | |
| Executive VP & CFO | 10.3yrs | CA$2.71m | 0.038% CA$400.3k | |
| Executive VP | 2.6yrs | CA$1.95m | 0.0035% CA$36.6k | |
| Executive VP & President of Concessions | 1.1yrs | CA$1.58m | no data | |
| Executive VP of Industrial & Chief Safety Officer | 4.4yrs | CA$1.63m | no data | |
| Senior Vice President of Corporate Development & Investor Relations | 2.1yrs | no data | 0.0021% CA$22.3k | |
| Senior Vice President of Human Resources | 1.7yrs | no data | no data | |
| Senior Vice President of Strategic Business Development | 8.1yrs | CA$696.64k | no data | |
| Senior Vice President of Industrial East & West | 9.1yrs | no data | no data | |
| Senior Vice President of Finance | 0yrs | no data | 0.00033% CA$3.4k |
2.6yrs
Average Tenure
Experienced Management: ARE's management team is considered experienced (2.6 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | 1.4yrs | CA$3.10m | 0.012% CA$129.9k | |
| Independent Director | 6.7yrs | CA$206.00k | 0.013% CA$137.2k | |
| Independent Director | 10.9yrs | CA$237.50k | 0.15% CA$1.5m | |
| Independent Director | 2.7yrs | CA$213.50k | no data | |
| Non-Executive Chairman | 1.4yrs | CA$4.94m | 0.089% CA$923.9k | |
| Independent Director | 10.8yrs | CA$232.00k | 1.07% CA$11.1m | |
| Independent Director | 3.7yrs | CA$217.50k | 0.0035% CA$36.3k | |
| Independent Director | 0.7yrs | no data | 0.0044% CA$46.3k | |
| Lead Director | 0yrs | CA$246.50k | 0.016% CA$171.4k | |
| Independent Director | 0.7yrs | no data | 0.0049% CA$50.8k |
2.7yrs
Average Tenure
64yo
Average Age
Experienced Board: ARE's board of directors are not considered experienced ( 2.7 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: ARE 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$1.041b
- Shares outstanding: 60.72m
- Website: https://www.aecon.com
Number of Employees
Location
- Aecon Group Inc.
- 20 Carlson Court
- Suite 800
- 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. provides construction and infrastructure development services to private and public sector clients in Canada, the United States, and internationally. It operates through three segments: Infrastructure, Industrial, and Concessions. The Infrastructure segment is involved in the construction of roads and bridges, and rail and transit systems, as well as in municipal road construction, asphalt production and aggregates, material engineering and design, and foundation activities. This segment also undertakes hydroelectric, tunnel, airport, marine, and civil transportation infrastructure projects; and constructs water treatment facilities and mechanical systems. The Industrial segment constructs steam assisted gravity drainage systems, turnkey well pad and field facilities, liquefied natural gas plants, and gas compression facilities, as well as nuclear, thermal and hydro, natural gas, and renewable power plants; and undertakes oil and gas pipeline construction and integrity program, telecom infrastructure, power transmission and distribution network, water and sewer construction, district energy, and high voltage transmission projects. This segment also offers locate, fabrication, modularization, field installation, and plant maintenance turnaround services; and mine site development services, such as overburden removal and piling, environmental reclamation, ore storage facilities, heavy mechanical work, and process installation services. The Concessions segment develops, finances, constructs, and operates infrastructure projects by way of build-operate-transfer, build-own-operate-transfer, and other public-private partnership contract structures, as well as offers private finance solutions. The company was formerly known as Prefac Concrete Co. Ltd. and changed its name to Aecon Group Inc. in June 2001. Aecon Group Inc. was founded in 1877 and is based in Toronto, Canada.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/02/25 23:36 |
| End of Day Share Price | 2020/02/25 00:00 |
| Earnings | 2019/09/30 |
| Annual Earnings | 2018/12/31 |
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.