NYSE:ACA

Stock Analysis Report

Executive Summary

Arcosa, Inc. manufactures and sells infrastructure-related products and services for the construction, energy, and transportation markets.

Rewards

Trading at 20.2% below its fair value

Earnings are forecast to grow 14.6% per year

Earnings grew by 65.8% over the past year

Risk Analysis

Highly volatile share price over past 3 months



Snowflake Analysis

Excellent balance sheet with proven track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: ACA's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.1%

ACA

3.6%

US Construction

2.0%

US Market


1 Year Return

56.1%

ACA

20.6%

US Construction

23.5%

US Market

Return vs Industry: ACA exceeded the US Construction industry which returned 23.6% over the past year.

Return vs Market: ACA exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

ACAIndustryMarket
7 Day2.1%3.6%2.0%
30 Day1.7%5.0%4.3%
90 Day39.6%4.8%12.2%
1 Year56.9%56.1%21.6%20.6%26.1%23.5%
3 Yearn/a12.3%9.8%53.1%43.2%
5 Yearn/a52.3%46.7%75.5%56.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

19.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ACA ($46.08) is trading below our estimate of fair value ($57.78)

Significantly Below Fair Value: ACA is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ACA is poor value based on its PE Ratio (18.7x) compared to the Construction industry average (17.5x).

PE vs Market: ACA is good value based on its PE Ratio (18.8x) compared to the US market (19.1x).


Price to Earnings Growth Ratio

PEG Ratio: ACA is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: ACA is good value based on its PB Ratio (1.3x) compared to the US Construction industry average (1.8x).


Next Steps

Future Growth

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

14.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ACA's forecast earnings growth (14.6% per year) is above the savings rate (1.7%).

Earnings vs Market: ACA's earnings (14.6% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: ACA's revenue (7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: ACA's revenue (7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ACA's Return on Equity is forecast to be low in 3 years time (7.6%).


Next Steps

Past Performance

How has Arcosa performed over the past 5 years?

-11.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ACA has high quality earnings.

Growing Profit Margin: ACA's current net profit margins (7.1%) are higher than last year (5%).


Past Earnings Growth Analysis

Earnings Trend: ACA's earnings have declined by -11.9% per year over the past 5 years.

Accelerating Growth: ACA's earnings growth over the past year (65.8%) exceeds its 5-year average (-11.9% per year).

Earnings vs Industry: ACA earnings growth over the past year (65.8%) exceeded the Construction industry -0.1%.


Return on Equity

High ROE: ACA's Return on Equity (6.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Arcosa's financial position?


Financial Position Analysis

Short Term Liabilities: ACA's short term assets ($674.4M) exceed its short term liabilities ($223.8M).

Long Term Liabilities: ACA's short term assets ($674.4M) exceed its long term liabilities ($228.6M).


Debt to Equity History and Analysis

Debt Level: ACA's debt to equity ratio (6%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if ACA's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: ACA's debt is well covered by operating cash flow (208.2%).

Interest Coverage: ACA's interest payments on its debt are well covered by EBIT (32.4x coverage).


Balance Sheet

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

Debt Coverage by Assets: ACA's debt is covered by short term assets (assets are 6.4x debt).


Next Steps

Dividend

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

0.43%

Current Dividend Yield


Dividend Yield vs Market

company0.4%marketbottom25%1.4%markettop25%3.7%industryaverage0.9%forecastin3Years0.6%

Current dividend yield vs market & industry

Notable Dividend: ACA's dividend (0.44%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: ACA's dividend (0.44%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: ACA is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: ACA is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: ACA is not paying a notable dividend for the US market.


Future Payout to Shareholders

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


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Antonio Carrillo (53yo)

1.2yrs

Tenure

US$8,776,865

Compensation

Mr. Antonio Carrillo serves as Independent Director at NRG Energy Inc. since October 15, 2019. He serves as Non Independent Director, President and Chief Executive Officer at Arcosa, Inc. since November, 2 ...


CEO Compensation Analysis

Compensation vs Market: Antonio's total compensation ($USD8.78M) is above average for companies of similar size in the US market ($USD3.86M).

Compensation vs Earnings: Antonio's compensation has increased by more than 20% in the past year.


Management Age and Tenure

2.0yrs

Average Tenure

51yo

Average Age

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


Board Age and Tenure

1.3yrs

Average Tenure

67yo

Average Age

Experienced Board: ACA's board of directors are not considered experienced ( 1.3 years average tenure), which suggests a new board.


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

SellUS$36,578,90013 Sep 19
ValueAct Capital Management L.P.
EntityCompany
Shares1,054,000
Max PriceUS$34.84
SellUS$16,364,01007 Aug 19
ValueAct Capital Management L.P.
EntityCompany
Shares440,963
Max PriceUS$38.09
SellUS$11,589,21006 Aug 19
ValueAct Capital Management L.P.
EntityCompany
Shares327,000
Max PriceUS$35.72
SellUS$54,045,00014 Jun 19
ValueAct Capital Management L.P.
EntityCompany
Shares1,500,000
Max PriceUS$36.03
SellUS$46,062,90014 Mar 19
ValueAct Capital Management L.P.
EntityCompany
Shares1,395,000
Max PriceUS$33.02

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Gail Peck (51yo)

    Senior VP of Finance & Treasurer

    • Kathryn Collins (55yo)

      Chief Human Resources Officer

      • Tenure: 2yrs
    • Jess Collins (53yo)

      President of Transportation Products

      • Tenure: 2yrs
      • Compensation: US$802.79k
    • Mary Henderson (60yo)

      Chief Accounting Officer

      • Tenure: 2yrs
    • Kerry Cole (51yo)

      President of Energy Equipment

      • Tenure: 2yrs
      • Compensation: US$1.19m
    • Antonio Carrillo (53yo)

      President

      • Tenure: 1.2yrs
      • Compensation: US$8.78m
    • Bryan Stevenson (46yo)

      Chief Legal Officer

      • Tenure: 2yrs
    • Scott Beasley (38yo)

      Chief Financial Officer

      • Tenure: 2yrs
      • Compensation: US$855.93k
    • Reid Essl (37yo)

      President of Construction Products

      • Compensation: US$800.38k
    • Yuki Whitmire

      Associate General Counsel & Corporate Secretary


      Board Members

      • Rhys Best (73yo)

        Non-Exeutive Chairman

        • Tenure: 1.3yrs
        • Compensation: US$43.33k
      • David Biegler (73yo)

        Independent Director

        • Tenure: 1.3yrs
        • Compensation: US$48.59k
      • Douglas Rock (72yo)

        Independent Director

        • Tenure: 1.3yrs
        • Compensation: US$25.00k
      • Joe Alvarado (67yo)

        Independent Director

        • Tenure: 1.3yrs
        • Compensation: US$89.68k
      • Ron Gafford (69yo)

        Independent Director

        • Tenure: 1.3yrs
        • Compensation: US$29.17k
      • John Lindsay (58yo)

        Independent Director

        • Tenure: 1.3yrs
        • Compensation: US$86.68k
      • Melanie Trent (54yo)

        Independent Director

        • Tenure: 1.3yrs
        • Compensation: US$91.68k
      • Jay Craig (59yo)

        Independent Director

        • Tenure: 1.3yrs
        • Compensation: US$80.68k
      • Antonio Carrillo (53yo)

        President

        • Tenure: 1.2yrs
        • Compensation: US$8.78m

      Company Information

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


      Key Information

      • Name: Arcosa, Inc.
      • Ticker: ACA
      • Exchange: NYSE
      • Founded:
      • Industry: Construction and Engineering
      • Sector: Capital Goods
      • Market Cap: US$2.251b
      • Shares outstanding: 48.39m
      • Website: https://www.arcosa.com

      Number of Employees


      Location

      • Arcosa, Inc.
      • 500 North Akard Street
      • Suite 400
      • Dallas
      • Texas
      • 75201
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      ACANYSE (New York Stock Exchange)YesCommon StockUSUSDOct 2018
      ACA *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 2018
      EOBDB (Deutsche Boerse AG)YesCommon StockDEEUROct 2018

      Biography

      Arcosa, Inc. manufactures and sells infrastructure-related products and services for the construction, energy, and transportation markets. It operates through three segments: Construction Products Group, Energy Equipment Group, and Transportation Products Group. The Construction Products Group segment offers lightweight and natural construction aggregates, and trench shields and shoring products that are used in construction landscape, including commercial, industrial, road and bridge, and underground construction. It serves concrete producers; commercial, residential, industrial, and highway contractors; manufacturers of masonry products; state and local governments; and equipment rental dealers. The Energy Equipment Group segment provides structural wind towers for wind turbine producers; steel utility structures for electricity transmission and distribution; and pressurized and non-pressurized storage and distribution containers that store and transport various products, such as propane, anhydrous ammonia, and natural gas liquids. The Transportation Products Group segment offers hopper barges, tank barges, fiberglass covers, hatches, castings, and winches for commercial marine transportation companies and industrial shippers; axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as for other industrial uses; and cast components for use in the industrial and mining sectors. The company is headquartered in Dallas, Texas. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/18 00:45
      End of Day Share Price2020/01/17 00:00
      Earnings2019/09/30
      Annual Earnings2018/12/31


      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.