TSX:CAE

Stock Analysis Report

Executive Summary

CAE Inc., together with its subsidiaries, provides training solutions for the civil aviation, defence and security, and healthcare markets worldwide.

Rewards

Earnings are forecast to grow 9.87% per year

Earnings grew by 22.5% over the past year

Pays a reliable dividend of 1.09%

Risk Analysis

Debt is not well covered by operating cash flow



Snowflake Analysis

Solid track record average dividend payer.


Similar Companies

Share Price & News

How has CAE's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CAE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.0%

CAE

-1.2%

CA Aerospace & Defense

0.2%

CA Market


1 Year Return

45.7%

CAE

31.0%

CA Aerospace & Defense

4.9%

CA Market

Return vs Industry: CAE exceeded the Canadian Aerospace & Defense industry which returned 31% over the past year.

Return vs Market: CAE exceeded the Canadian Market which returned 4.9% over the past year.


Shareholder returns

CAEIndustryMarket
7 Day-1.0%-1.2%0.2%
30 Day4.1%2.6%0.4%
90 Day13.5%9.9%3.7%
1 Year47.6%45.7%32.7%31.0%8.2%4.9%
3 Year104.9%96.1%78.4%71.3%15.9%5.5%
5 Year186.0%163.6%143.0%125.8%33.8%14.3%

Price Volatility Vs. Market

How volatile is CAE's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is CAE undervalued compared to its fair value and its price relative to the market?

30.14x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CAE (CA$40.3) is trading above our estimate of fair value (CA$31.38)

Significantly Below Fair Value: CAE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CAE is poor value based on its PE Ratio (30.1x) compared to the Aerospace & Defense industry average (21x).

PE vs Market: CAE is poor value based on its PE Ratio (30.1x) compared to the Canadian market (16x).


Price to Earnings Growth Ratio

PEG Ratio: CAE is poor value based on its PEG Ratio (3.1x)


Price to Book Ratio

PB vs Industry: CAE is overvalued based on its PB Ratio (4.5x) compared to the CA Aerospace & Defense industry average (2.6x).


Next Steps

Future Growth

How is CAE forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

9.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CAE's forecast earnings growth (9.9% per year) is above the savings rate (1.4%).

Earnings vs Market: CAE's earnings (9.9% per year) are forecast to grow slower than the Canadian market (10.7% per year).

High Growth Earnings: CAE's earnings are forecast to grow, but not significantly.

Revenue vs Market: CAE's revenue (6% per year) is forecast to grow faster than the Canadian market (4.9% per year).

High Growth Revenue: CAE's revenue (6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CAE's Return on Equity is forecast to be low in 3 years time (16%).


Next Steps

Past Performance

How has CAE performed over the past 5 years?

11.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CAE has high quality earnings.

Growing Profit Margin: CAE's current net profit margins (9.7%) are higher than last year (9.7%).


Past Earnings Growth Analysis

Earnings Trend: CAE's earnings have grown by 11.5% per year over the past 5 years.

Accelerating Growth: CAE's earnings growth over the past year (22.5%) exceeds its 5-year average (11.5% per year).

Earnings vs Industry: CAE earnings growth over the past year (22.5%) exceeded the Aerospace & Defense industry 12.4%.


Return on Equity

High ROE: CAE's Return on Equity (14.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is CAE's financial position?


Financial Position Analysis

Short Term Liabilities: CAE's short term assets (CA$2.0B) exceed its short term liabilities (CA$1.7B).

Long Term Liabilities: CAE's short term assets (CA$2.0B) do not cover its long term liabilities (CA$3.3B).


Debt to Equity History and Analysis

Debt Level: CAE's debt to equity ratio (95.1%) is considered high.

Reducing Debt: CAE's debt to equity ratio has increased from 68.7% to 95.1% over the past 5 years.

Debt Coverage: CAE's debt is not well covered by operating cash flow (20%).

Interest Coverage: CAE's interest payments on its debt are well covered by EBIT (4.7x coverage).


Balance Sheet

Inventory Level: CAE has a high level of physical assets or inventory.

Debt Coverage by Assets: CAE's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is CAE's current dividend yield, its reliability and sustainability?

1.09%

Current Dividend Yield


Upcoming Dividend Payment

Purchase CAE before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.1%marketbottom25%1.9%markettop25%5.3%industryaverage1.7%forecastin3Years1.2%

Current dividend yield vs market & industry

Notable Dividend: CAE's dividend (1.09%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.89%).

High Dividend: CAE's dividend (1.09%) is low compared to the top 25% of dividend payers in the Canadian market (5.31%).


Stability and Growth of Payments

Stable Dividend: CAE's dividends per share have been stable in the past 10 years.

Growing Dividend: CAE's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (31.4%), CAE's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CAE's dividends in 3 years are forecast to be well covered by earnings (30.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average management tenure


CEO

Marc Parent (58yo)

10.3yrs

Tenure

CA$7,545,220

Compensation

Mr. Marc Parent has been the Chief Executive Officer and President of CAE Inc. since October 2009 and its Director since November 2008. Mr. Parent joined CAE in February 2005 as Group President, Simulation ...


CEO Compensation Analysis

Compensation vs Market: Marc's total compensation ($USD5.69M) is above average for companies of similar size in the Canadian market ($USD3.73M).

Compensation vs Earnings: Marc's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Marc Parent
President10.3yrsCA$7.55m0.11% CA$11.6m
Sonya Branco
VP of Finance & CFO3.8yrsCA$2.70m0.0060% CA$647.0k
Mark Hounsell
General Counsel4yrsCA$1.65m0.0077% CA$825.7k
Nick Leontidis
Group President of Civil Aviation Training Solutions13.8yrsCA$3.32m0.019% CA$2.1m
Pascal Grenier
Vice President of Global Operations2.6yrsno data0.0031% CA$337.0k
Andrew Arnovitz
Vice President of Investor Relations & Strategy13.1yrsno data0.0014% CA$146.4k
Hélène Gagnon
Vice President of Public Affairs & Global Communications5yrsno data0.0022% CA$235.8k
Dan Sharkey
Vice President of Global Human Resources5yrsno data0.0028% CA$299.3k
Todd Probert
Group President of Defence & Security0.08yrsno datano data
Mario Pizzolongo
Treasurer4.1yrsno datano data

4.5yrs

Average Tenure

Experienced Management: CAE's management team is considered experienced (4.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Marc Parent
President10.3yrsCA$7.55m0.11% CA$11.6m
Michael Roach
Independent Director2.3yrsCA$177.00kno data
Michael Fortier
Independent Director9.5yrsCA$192.00kno data
Andrew Stevens
Independent Director7.1yrsCA$197.00kno data
John Manley
Chairman of Board1.5yrsCA$264.37kno data
François Olivier
Independent Director3yrsCA$183.29kno data
Marianne Harrison
Independent Director0.5yrsno datano data
Margaret Billson
Independent Director4.5yrsCA$183.29kno data
Alan MacGibbon
Independent Director4.8yrsCA$202.00k0.0015% CA$165.8k

4.5yrs

Average Tenure

58yo

Average Age

Experienced Board: CAE's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CAE 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

CAE Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: CAE Inc.
  • Ticker: CAE
  • Exchange: TSX
  • Founded: 1947
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: CA$10.765b
  • Shares outstanding: 266.07m
  • Website: https://www.cae.com

Number of Employees


Location

  • CAE Inc.
  • 8585 Cote-de-Liesse
  • Saint-Laurent
  • Quebec
  • H4T 1G6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CAETSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 1972
CAENYSE (New York Stock Exchange)YesCommon SharesUSUSDDec 1972
CE9DB (Deutsche Boerse AG)YesCommon SharesDEEURDec 1972

Biography

CAE Inc., together with its subsidiaries, provides training solutions for the civil aviation, defence and security, and healthcare markets worldwide. The company’s Civil Aviation Training Solutions segment provides training solutions for flight, cabin, maintenance, and ground personnel in commercial, business, and helicopter aviation; flight simulation training devices; and ab initio pilot training and crew sourcing services. Its Defence and Security segment operates as a training systems integrator for defense forces in the air, land, and naval domains, as well as for government organizations responsible for public safety. The company’s Healthcare segment designs and manufactures simulators; offers audiovisual and simulation center management solutions; and develops courseware and offers services for training of medical, nursing, and allied healthcare students, as well as medical practitioners. It trains approximately 220,000 civil and defence crewmembers, including approximately 135,000 pilots and various healthcare professionals. CAE Inc. has a strategic partnership with Directional Aviation Capital. The company was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in June 1993. CAE Inc. was founded in 1947 and is headquartered in Saint-Laurent, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 23:43
End of Day Share Price2020/02/18 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


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.