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

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


Market Performance


7 Day Return

-0.4%

HRX

0.8%

CA Aerospace & Defense

0.3%

CA Market


1 Year Return

23.8%

HRX

18.6%

CA Aerospace & Defense

0.1%

CA Market

Return vs Industry: HRX exceeded the Canadian Aerospace & Defense industry which returned 18.6% over the past year.

Return vs Market: HRX exceeded the Canadian Market which returned 0.1% over the past year.


Shareholder returns

HRXIndustryMarket
7 Day-0.4%0.8%0.3%
30 Day-1.7%-3.0%-2.5%
90 Day-16.8%-10.2%-1.4%
1 Year23.8%23.8%20.1%18.6%3.6%0.1%
3 Year25.5%25.5%60.7%54.1%14.3%4.1%
5 Year54.3%54.3%111.1%96.4%25.0%6.9%

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?

35.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: HRX (CA$16.65) is trading below our estimate of fair value (CA$25.73)

Significantly Undervalued: HRX is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: HRX is good value based on its PE Ratio (20.6x) compared to the Aerospace & Defense industry average (22.4x).

PE vs Market: HRX is poor value based on its PE Ratio (20.6x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

Low 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 (1.5x) compared to the CA Aerospace & Defense industry average (3.3x).


Next Steps

Future Growth

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

18.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HRX's forecast earnings growth (18.1% per year) is above the savings rate (1.9%).

Earnings vs Market: HRX's earnings (18.1% per year) are forecast to grow faster than the Canadian market (13.2% per year).

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

Revenue vs Market: HRX's revenue (6.8% per year) is forecast to grow faster than the Canadian market (5.7% per year).

High Growth Revenue: HRX's revenue (6.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: HRX's Return on Equity is forecast to be low in 3 years time (7.4%).


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

Earnings Trend: HRX's earnings have grown by 17% per year over the past 5 years.

Accelerating Growth: HRX's earnings growth over the past year (123%) exceeds its 5-year average (17% per year).

Earnings vs Industry: HRX earnings growth over the past year (123%) exceeded the Aerospace & Defense industry 11.4%.


Return on Equity

High ROE: HRX's Return on Equity (7.2%) is considered low.


Return on Assets

ROA vs Industry: HRX's Return on Assets is below or equal to the Aerospace & Defense industry average last year.


Return on Capital Employed

ROCE Improving: HRX's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Héroux-Devtek's financial position?


Financial Position Analysis

Short Term Liabilities: HRX's short term assets (CA$379.3M) exceeds its short term liabilities (CA$186.9M)

Long Term Liabilities: HRX's short term assets (379.3M) exceeds its long term liabilities (325.9M)


Debt to Equity History and Analysis

Debt Level: HRX's debt to equity ratio (64%) is considered high

Reducing Debt: HRX's debt to equity ratio has increased from 33.5% to 64% over the past 5 years.

Debt Coverage: HRX's debt is well covered by operating cash flow (25.3%).

Interest Coverage: HRX's interest payments on its debt are well covered by EBIT (6x coverage).


Balance Sheet

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

Debt Coverage by Assets: HRX's debt is covered by short term assets (assets are 1.471970x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%6.0%industryaverage1.8%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

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

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

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

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

Compensation vs. Market: Martin has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Canadian market.

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


Management Age and Tenure

0.3yrs

Average Tenure

Experienced Management: HRX's management team is not considered experienced ( 0.3 years average tenure), which suggests a new team.


Board Age and Tenure

4.2yrs

Average Tenure

68yo

Average Age

Experienced Board: HRX's board of directors are considered experienced (4.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


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$90,30018 Nov 18
Stéphane Arsenault
EntityIndividual
Role
Chief Financial Officer
CFO & VP
Shares7,000
Max PriceCA$12.90
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$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: 6.1yrs
    • 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: 9.2yrs
    • Compensation: CA$95.00k
  • Louis Morin (61yo)

    Independent Director

    • Tenure: 11.6yrs
    • Compensation: CA$95.00k
  • Helmut Hofmann

    Honorary Director

    • Tenure: 11.2yrs
    • 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: 4.2yrs
    • Compensation: CA$85.00k
  • Jim Morris (70yo)

    Independent Director

    • Tenure: 6.2yrs
    • Compensation: CA$110.82k
  • Gilles Labbé (63yo)

    Executive Chairman of the Board

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

    Independent Director

    • Tenure: 0.7yrs
    • 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$605.431m
  • 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 Analysis2019/10/15 23:36
End of Day Share Price2019/10/15 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.