TSX:HRX

Stock Analysis Report

Executive Summary

Héroux-Devtek Inc. engages in the design, development, manufacture, integration, testing, and repair and overhaul of aircraft landing gears, hydraulic and electromechanical flight control actuators, custom ball screws, and fracture-critical components in Canada, the United States, the United Kingdom, Spain, Rest of Europe, and internationally.

Snowflake

Fundamentals

Good value with adequate balance sheet.


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


Market Performance


7 Day Return

-3.3%

TSX:HRX

-2.6%

CA Aerospace & Defense

1.2%

CA Market


1 Year Return

5.2%

TSX:HRX

18.0%

CA Aerospace & Defense

-0.1%

CA Market

HRX underperformed the Aerospace & Defense industry which returned 18% over the past year.

HRX outperformed the Market in Canada which returned -0.2% over the past year.


Share holder returns

HRXIndustryMarket
7 Day-3.3%-2.6%1.2%
30 Day-4.9%-0.5%4.0%
90 Day-4.0%-4.2%1.4%
1 Year5.2%5.2%19.5%18.0%3.4%-0.1%
3 Year22.4%22.4%70.9%63.9%19.3%8.6%
5 Year63.6%63.6%124.1%108.6%19.0%2.0%

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 based on future cash flows and its price relative to the stock market?

41%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Héroux-Devtek's share price is below the future cash flow value, and at a moderate discount (> 20%).

Héroux-Devtek's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Héroux-Devtek is good value based on earnings compared to the North America Aerospace & Defense industry average.

Héroux-Devtek is overvalued based on earnings compared to the Canada market.


Price Based on Expected Growth

Héroux-Devtek is poor value based on expected growth next year.


Price Based on Value of Assets

Héroux-Devtek is good value based on assets compared to the CA Aerospace & Defense industry average.


Next Steps

Future Growth

How is Héroux-Devtek expected to perform in the next 1 to 3 years based on estimates from 7 analysts?

18.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Héroux-Devtek's revenue is expected to grow by 6.7% yearly, however this is not considered high growth (20% yearly).

Héroux-Devtek's earnings are expected to grow by 18.4% yearly, however this is not considered high growth (20% yearly).

Héroux-Devtek's revenue growth is expected to exceed the Canada market average.

Héroux-Devtek's earnings growth is expected to exceed the Canada market average.

Héroux-Devtek's earnings growth is expected to exceed the low risk savings rate of 1.9%.


Earnings per Share Growth Estimates


Future Return on Equity

Héroux-Devtek is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

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

17.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Héroux-Devtek's year on year earnings growth rate has been positive over the past 5 years.

Héroux-Devtek's 1-year earnings growth exceeds its 5-year average (123% vs 17%)

Héroux-Devtek's earnings growth has exceeded the North America Aerospace & Defense industry average in the past year (123% vs 13%).


Return on Equity

Héroux-Devtek has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Héroux-Devtek used its assets less efficiently than the North America Aerospace & Defense industry average last year based on Return on Assets.


Return on Capital Employed

Héroux-Devtek's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Héroux-Devtek's financial position?


Financial Position Analysis

Héroux-Devtek is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Héroux-Devtek's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Héroux-Devtek's level of debt (64%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (33.5% vs 64% today).

Debt is well covered by operating cash flow (25.3%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 6x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 1.5x debt.


Next Steps

Dividend

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


Dividend Yield and Payments Analysis

Unable to evaluate Héroux-Devtek's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.

Unable to evaluate Héroux-Devtek's dividend against the top 25% market benchmark as the company has not reported any payouts.

Unable to perform a dividend volatility check as Héroux-Devtek has not reported any payouts.

Unable to verify if Héroux-Devtek's dividend has been increasing as the company has not reported any payouts.


Current Payout to Shareholders

Unable to calculate sustainability of dividends as Héroux-Devtek has not reported any payouts.


Future Payout to Shareholders

Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.


Next Steps

Management

What is the CEO of Héroux-Devtek's salary, the management and board of directors tenure and is there insider trading?

0.3yrs

Average management tenure


CEO

Martin Brassard 0

0.3yrs

Tenure

CA$1,102,441

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 until June 1, 2 ...


CEO Compensation Analysis

Martin's remuneration is about average for companies of similar size in Canada.

Martin's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

0.3yrs

Average Tenure

The average tenure for the Héroux-Devtek management team is less than 2 years, this suggests a new team.


Board Age and Tenure

4.1yrs

Average Tenure

68yo

Average Age

The tenure for the Héroux-Devtek board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellCA$55,63804 Jun 19
Jean Gravel
EntityIndividual
Role
Head of Sales
Vice-President of Sales & Program Management
Shares3,300
Max PriceCA$16.86
BuyCA$640,00006 Feb 19
Fonds de solidarité FTQ
EntityCompany
Shares50,000
Max PriceCA$12.80
BuyCA$23,78021 Dec 18
Jean Gravel
EntityIndividual
Role
Head of Sales
Vice-President of Sales & Program Management
Shares1,995
Max PriceCA$11.92
BuyCA$1,30505 Dec 18
Stéphane Rainville
EntityIndividual
Role
Head of Human Resources
Vice President of Human Resources
Shares100
Max PriceCA$13.05
BuyCA$12,25505 Dec 18
Patrick Gagnon
EntityIndividual
Shares950
Max PriceCA$12.90
BuyCA$91,05527 Nov 18
Gilles Labbé
EntityIndividual
Role
Chairman of the Board
Executive Chairman of the Board
Shares7,000
Max PriceCA$13.05
BuyCA$517,20018 Nov 18
Gilles Labbé
EntityIndividual
Role
Chairman of the Board
Executive Chairman of the Board
Shares40,000
Max PriceCA$12.93
BuyCA$90,30018 Nov 18
Stéphane Arsenault
EntityIndividual
Role
Chief Financial Officer
CFO & VP
Shares7,000
Max PriceCA$12.90
BuyCA$25,28015 Nov 18
Nathalie Bourque
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceCA$12.76
BuyCA$24,72814 Nov 18
Stéphane Rainville
EntityIndividual
Role
Head of Human Resources
Vice President of Human Resources
Shares1,900
Max PriceCA$13.04
BuyCA$32,49713 Nov 18
Nathalie Bourque
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceCA$13.21
BuyCA$103,00013 Nov 18
Martin Brassard
EntityIndividual
Role
Chief Executive Officer
President
Shares8,000
Max PriceCA$12.90

Ownership Breakdown


Management Team

  • Martin Brassard

    President

    • Tenure: 0.3yrs
    • Compensation: CA$1.10m
  • Gaétan Roy

    Managing Director of UK Runcorn - Landing Gear

    • Tenure: 0yrs
    • Compensation: CA$606.54k
  • Guinn Crousen

    President of Progressive Incorporated - Aerostructure Division

    • Tenure: 0yrs
    • Compensation: CA$283.30k
  • Jean Gravel

    Vice-President of Sales & Program Management

    • Tenure: 0yrs
  • François Renaud

    Corporate Secretary

    • Tenure: 0yrs
  • Stéphane Arsenault

    CFO & VP

    • Tenure: 6yrs
    • Compensation: CA$745.43k
  • Gilles Labbé (63yo)

    Executive Chairman of the Board

    • Tenure: 0.3yrs
    • Compensation: CA$1.82m
  • Jean-Philippe Sanche

    Director of Legal Affairs

    • Tenure: 0yrs
  • Stéphane Rainville

    Vice President of Human Resources

    • Tenure: 0yrs
  • Annie Goudreault

    VP & Corporate Controller

    • Tenure: 0yrs

Board Members

  • Paule Doré (68yo)

    Independent Director

    • Tenure: 9.1yrs
    • Compensation: CA$95.00k
  • Louis Morin (61yo)

    Independent Director

    • Tenure: 11.5yrs
    • Compensation: CA$95.00k
  • Helmut Hofmann

    Honorary Director

    • Tenure: 11.1yrs
    • Compensation: CA$49.67k
  • Brian Robbins (72yo)

    Lead Director

    • Tenure: 0.3yrs
    • Compensation: CA$121.11k
  • Martin Brassard

    President

    • Tenure: 0.3yrs
    • Compensation: CA$1.10m
  • Nathalie Bourque

    Independent Director

    • Tenure: 4.1yrs
    • Compensation: CA$85.00k
  • Jim Morris (70yo)

    Independent Director

    • Tenure: 6.1yrs
    • Compensation: CA$110.82k
  • Gilles Labbé (63yo)

    Executive Chairman of the Board

    • Tenure: 0.3yrs
    • Compensation: CA$1.82m
  • Beverly Wyse

    Independent Director

    • Tenure: 0.6yrs
    • Compensation: CA$37.26k

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$615.612m
  • Shares outstanding: 36.36m
  • Website: https://www.herouxdevtek.com

Number of Employees


Location

  • Héroux-Devtek Inc.
  • Complexe Saint-Charles
  • East Tower
  • Longueuil
  • Quebec
  • J4K 5G4
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HRXTSX (The Toronto Stock Exchange)YesCommon SharesCACADAug 1988
HERX.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDAug 1988

Biography

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


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/14 23:37
End of Day Share Price2019/09/13 00:00
Earnings2019/06/30
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.