TSX:HRX

Stock Analysis Report

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Market Cap

CA$639.9m

Last Updated

2021/07/31 23:01 UTC

Data Sources

Company Financials +

Executive Summary

Héroux-Devtek Inc. engages in the design, development, manufacture, assembling, and repair and overhaul of aircraft landing gears, hydraulic and electromechanical flight control actuators, custom ball screws, and fracture-critical components. More Details


Snowflake Analysis

Adequate balance sheet and fair value.


Similar Companies

Share Price & News

How has Héroux-Devtek's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HRX is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: HRX's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

-3.2%

HRX

-2.8%

CA Aerospace & Defense

1.4%

CA Market


1 Year Return

83.1%

HRX

87.0%

CA Aerospace & Defense

29.0%

CA Market

Return vs Industry: HRX underperformed the Canadian Aerospace & Defense industry which returned 86.9% over the past year.

Return vs Market: HRX exceeded the Canadian Market which returned 29.1% over the past year.


Shareholder returns

HRXIndustryMarket
7 Day-3.2%-2.8%1.4%
30 Day-2.6%-1.7%-0.2%
90 Day5.4%-2.6%4.0%
1 Year83.1%83.1%87.4%87.0%32.9%29.0%
3 Year11.5%11.5%30.1%26.4%31.3%18.6%
5 Year15.0%15.0%101.9%89.8%51.7%29.4%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Héroux-Devtek undervalued compared to its fair value and its price relative to the market?

30.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HRX (CA$17.39) is trading below our estimate of fair value (CA$25.08)

Significantly Below Fair Value: HRX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: HRX is poor value based on its PE Ratio (31.6x) compared to the North American Aerospace & Defense industry average (30.1x).

PE vs Market: HRX is poor value based on its PE Ratio (31.6x) compared to the Canadian market (13.6x).


Price to Earnings Growth Ratio

PEG Ratio: HRX is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: HRX is good value based on its PB Ratio (1.6x) compared to the CA Aerospace & Defense industry average (4.2x).


Future Growth

How is Héroux-Devtek forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

27.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HRX's forecast earnings growth (27.6% per year) is above the savings rate (1.5%).

Earnings vs Market: HRX's earnings (27.6% per year) are forecast to grow faster than the Canadian market (13.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: HRX's revenue (4.4% per year) is forecast to grow slower than the Canadian market (5.4% per year).

High Growth Revenue: HRX's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HRX's Return on Equity is forecast to be low in 3 years time (8.5%).


Past Performance

How has Héroux-Devtek performed over the past 5 years?

-43.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HRX has a large one-off loss of CA$9.5M impacting its March 31 2021 financial results.

Growing Profit Margin: HRX became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: HRX's earnings have declined by 43.3% per year over the past 5 years.

Accelerating Growth: HRX has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: HRX has become profitable in the last year, making it difficult to compare its past year earnings growth to the Aerospace & Defense industry (-10.1%).


Return on Equity

High ROE: HRX's Return on Equity (5.1%) is considered low.


Financial Health

How is Héroux-Devtek's financial position?


Financial Position Analysis

Short Term Liabilities: HRX's short term assets (CA$434.8M) exceed its short term liabilities (CA$193.4M).

Long Term Liabilities: HRX's short term assets (CA$434.8M) exceed its long term liabilities (CA$268.2M).


Debt to Equity History and Analysis

Debt Level: HRX's debt to equity ratio (56.9%) is considered high.

Reducing Debt: HRX's debt to equity ratio has increased from 44.4% to 56.9% over the past 5 years.

Debt Coverage: HRX's debt is well covered by operating cash flow (40%).

Interest Coverage: HRX's interest payments on its debt are well covered by EBIT (4.4x coverage).


Balance Sheet


Dividend

What is Héroux-Devtek current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate HRX's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate HRX's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if HRX's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if HRX's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of HRX's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Martin Brassard

2yrs

Tenure

CA$1,523,719

Compensation

Mr. Martin Brassard has been President and Chief Executive Officer of Héroux-Devtek Inc. since June 1, 2019. Mr. Brassard was an Executive VP and Chief Operating Officer at Héroux-Devtek Inc from November ...


CEO Compensation Analysis

Compensation vs Market: Martin's total compensation ($USD1.22M) is above average for companies of similar size in the Canadian market ($USD833.87K).

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


Leadership Team

Experienced Management: HRX's management team is considered experienced (2 years average tenure).


Board Members

Experienced Board: HRX's board of directors are considered experienced (5.9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: HRX 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

Héroux-Devtek Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Héroux-Devtek Inc.
  • Ticker: HRX
  • Exchange: TSX
  • Founded: 1942
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: CA$639.891m
  • Shares outstanding: 36.80m
  • Website: https://www.herouxdevtek.com

Number of Employees


Location

  • Héroux-Devtek Inc.
  • West Tower, Saint-Charles Complex
  • Suite 600
  • Longueuil
  • Quebec
  • J4K 5G4
  • Canada

Listings


Biography

Héroux-Devtek Inc. engages in the design, development, manufacture, assembling, and repair and overhaul of aircraft landing gears, hydraulic and electromechanical flight control actuators, custom ball scre...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/31 23:01
End of Day Share Price2021/07/30 00:00
Earnings2021/03/31
Annual Earnings2021/03/31


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.