CAE.TO  Cae Inc

Exchange

TSX

Sector

Technology

Industry

Market Cap.

5.54B

Vuru Grade

42.62/100

Current Price

$20.42
-0.01 (-0.05%)

Growth Price

$11.07
Overvalued by 45.79%

Company Metrics

  • P/E 22.59
  • P/S 2.06
  • P/B 2.82
  • EPS 0.9
  • Cash ROIC 2.46%
  • Cash Ratio 0.41
  • Dividend 0.32 / 1.69%
  • Avg. Vol. 530,894.00
  • Shares 271.30M
  • Market Cap. 5.54B

Company Description

CAE Inc., together with its subsidiaries, designs, manufactures, and supplies simulation equipment and services; and develops integrated training solutions to the military, commercial airlines, business aircraft operators, aircraft manufacturers, and healthcare education and service providers worldwide. Its Simulation Products/Civil segment provides civil flight simulators, training devices, and v... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

CAE, Inc. (CAE) Reports Q3 EPS of C$0.25
StreetInsider.com - Feb 14, 2017
CAE, Inc. (NYSE: CAE) reported Q3 EPS of C$0.25, versus C$0.21 reported last year. Revenue for the quarter came in at C$682.7 million, versus C$616.3 million reported last year.
Flight-simulator maker CAE expects global defence spending to take off in ... - Financial Post
CAE Inc (CAE) Announces Quarterly Earnings Results, Beats Estimates By $0.03 EPS - The Cerbat Gem
CAE Inc. (CAE:CA) Rises 6.58% for February 15
Equities.com - Feb 15, 2017
February 15 was a positive day for CAE Inc. (CAE:CA) as its stock finished the day having gained 6.58% to hit a price of $20.24 a share.
Canada stocks higher at close of trade; S&P/TSX Composite up 0.37% - Investing.com
CANADA STOCKS-TSX sets record high, led by financials as bond yields rise - Nasdaq
CAE Inc (CAE) Forecasted to Earn FY2017 Earnings of $0.70 Per Share
Chaffey Breeze - 12 hours ago
CAE logo CAE Inc (NYSE:CAE) (TSE:CAE) - Desjardins raised their FY2017 earnings per share (EPS) estimates for shares of CAE in a note issued to investors on Wednesday.
TD upgrades CAE to buy, says risk profile is declining - Financial Post
Desjardins Weighs in on CAE Inc's FY2017 Earnings (CAE) - The Cerbat Gem
CAE Inc (CAE) Lifted to “Hold” at Zacks Investment Research
Sports Perspectives - Feb 8, 2017
CAE logo CAE Inc (NYSE:CAE) (TSE:CAE) was upgraded by Zacks Investment Research from a “sell” rating to a “hold” rating in a report issued on Tuesday.
Cae Inc (CAE) Earns Hold Rating from TD Securities
BNB Daily (blog) - Feb 10, 2017
Cae Inc logo TD Securities reissued their hold rating on shares of Cae Inc (TSE:CAE) (NYSE:CAE) in a research note released on Tuesday morning.
Cae Inc (CAE) Earns “Sector Perform” Rating from Royal Bank Of Canada - Sports Perspectives
Cae Inc (CAE) to Release Quarterly Earnings on Tuesday
Sports Perspectives - Feb 13, 2017
Cae Inc (TSE:CAE) (NYSE:CAE) is scheduled to announce its earnings results before the market opens on Tuesday, February 14th.
CAE Inc (CAE) is Mondrian Investment Partners LTD's 3rd Largest Position
Sports Perspectives - Feb 5, 2017
CAE logo Mondrian Investment Partners LTD reduced its position in CAE Inc (NYSE:CAE) (TSE:CAE) by 4.1% during the third quarter, according to its most recent Form 13F filing with the SEC.
Mondrian Investment Partners LTD Buys Wells Fargo, Walgreens Boots Alliance ... - GuruFocus.com
The CAE Inc. (CAE) Position Lowered by Emerald Acquisition Ltd.
DailyQuint - Feb 12, 2017
Emerald Acquisition Ltd. reduced its position in shares of CAE Inc. (NYSE:CAE) (TSE:CAE) by 29.5% during the third quarter, Holdings Channel reports.
Cae Inc (CAE) Set to Announce Quarterly Earnings on Tuesday - BBNS
CAE Inc (CAE) Given Consensus Rating of “Hold” by Brokerages
Sports Perspectives - Feb 1, 2017
CAE logo CAE Inc (NYSE:CAE) (TSE:CAE) has been given a consensus rating of “Hold” by the fourteen research firms that are covering the stock.
CAE Inc (CAE) Shares Sold by Cidel Asset Management Inc. - Community Financial News
CAE Inc (NYSE:CAE) Mean Price Target At $15.8700 - Equities Focus
TD Securities Upgrades CAE Inc (CAE) to “Buy”
Chaffey Breeze - Feb 17, 2017
CAE logo CAE Inc (NYSE:CAE) (TSE:CAE) was upgraded by analysts at TD Securities from a “hold” rating to a “buy” rating in a note issued to investors on Wednesday.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for CAE.TO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate CAE.TO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$20.42 Current Price

$11.07 Growth Price (DCF)

Overvalued by 45.79%


Growth Rate Assumed by Market: 28.63%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$15.82 Book Price

Overvalued by 22.52%


Poor Cash Return on Invested Capital over the past 5 years

CAE.TO has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

CAE.TO has only created $2.46 of cash for every $100 invested.
Figures in CAD. Fiscal year ends in March
20122013201420152016
Free Cash Flow 8.10M 28.90M 105.00M 63.00M 176.80M
divided by
Invested Capital 2.01B 2.58B 2.96B 3.29B 3.32B
Cash ROIC 0.40% 1.12% 3.55% 1.92% 5.33%

Shrinking Return on Equity over the past 5 years

CAE.TO has been shrinking returns with capital that shareholders have invested. This is a negative sign and demonstrates that both the business and management performance are weakening over time.

CAE.TO has generated $13.74 of Earnings for every $100 of Shareholders' Equity.
Figures in CAD. Fiscal year ends in March
20122013201420152016
Net Income 180.30M 142.40M 191.10M 204.70M 230.30M
divided by
Stockholders' Equity 1.02B 1.10B 1.44B 1.61B 1.89B
Return on Equity 17.64% 12.91% 13.26% 12.69% 12.19%

Excellent Business Performance over the past 10 years

CAE.TO has been able to maintain profitability in good times and bad. This could mean CAE.TO has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

CAE.TO has created positive free cash flow for 9 or more of the past 10 years.
Figures in CAD. Fiscal year ends in March
2007200820092010201120122013201420152016
Free Cash Flow 78.20M 71.40M -8.20M 136.10M 132.10M 8.10M 28.90M 105.00M 63.00M 176.80M

Weak Balance Sheet

CAE.TO's financial position is not ideal. The key is to check whether CAE.TO is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in CAD. Fiscal year ends in March
2007200820092010201120122013201420152016
Cash 150.20M 255.70M 195.20M 312.90M 276.40M 287.30M 293.20M 312.30M 330.20M 485.60M
Current Assets 625.70M 826.40M 899.90M 963.00M 1.02B 1.15B 1.33B 1.35B 1.56B 1.75B
Total Assets 1.96B 2.25B 2.68B 2.62B 2.86B 3.18B 3.88B 4.24B 4.66B 5.00B
Current Liabilities 620.80M 736.10M 890.70M 741.60M 762.90M 883.40M 1.00B 964.50M 1.04B 1.19B
Total Liabilities 1.13B 1.30B 1.47B 1.47B 1.59B 2.16B 2.78B 2.80B 3.04B 3.11B
Stockholder' Equity 829.90M 948.50M 1.21B 1.16B 1.27B 1.02B 1.10B 1.44B 1.61B 1.89B
Current Ratio 1.01 1.12 1.01 1.30 1.34 1.30 1.33 1.40 1.50 1.47
TL-to-TA 0.58 0.58 0.55 0.56 0.56 0.68 0.72 0.66 0.65 0.62

Consistent Reinvestment of Profits over the past 10 years

CAE.TO has consistently retained profits. This may put CAE.TO in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, CAE.TO can greatly improve their long-term economic picture.
Figures in CAD. Fiscal year ends in March
2007200820092010201120122013201420152016
Retained Earnings 510.20M 644.50M 813.30M 918.80M 1.05B 558.00M 625.70M 775.10M 857.30M 1.05B
Retained Earnings Growth - 26.32% 26.19% 12.97% 14.29% -46.86% 12.13% 23.88% 10.61% 22.24%

Competitive Industry over the past 10 years

CAE.TO is likely operating in an industry with medium to low barriers to entry. This may mean that CAE.TO doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that CAE.TO invests heavily in R&D and Sales, General & Administrative expenses.

Only $8.91 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in March
2007200820092010201120122013201420152016
Net Income 127.40M 43.70M 199.40M 144.50M 169.80M 180.30M 142.40M 191.10M 204.70M 230.30M
divided by
Revenue 1.25B 1.42B 1.66B 1.53B 1.63B 1.82B 2.10B 2.11B 2.25B 2.51B
Net Profit Margin 10.19% 3.07% 12.00% 9.47% 10.42% 9.90% 6.77% 9.04% 9.11% 9.17%

Growing Pricing Power over the past 10 years

CAE.TO has growing gross margins, suggesting that they have been able to set higher prices without consideration of the cost of goods sold. Look at its future prospects to determine sustainability and whether the economic moat will continue to strengthen.

$23.02 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in CAD. Fiscal year ends in March
2007200820092010201120122013201420152016
Gross Profit 197.50M 251.50M 303.60M 264.10M 258.30M 600.10M 621.70M 596.90M 603.70M 695.90M
divided by
Revenue 1.25B 1.42B 1.66B 1.53B 1.63B 1.82B 2.10B 2.11B 2.25B 2.51B
Gross Margin 15.79% 17.67% 18.26% 17.30% 15.86% 32.95% 29.54% 28.22% 26.88% 27.70%

High Capital Intensity over the past 10 years

CAE.TO spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

133.21% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in CAD. Fiscal year ends in March
2007200820092010201120122013201420152016
Capital Expenditure 161.10M 189.50M 203.70M 130.90M 114.90M 225.80M 175.20M 171.00M 205.60M 169.00M
divided by
Net Income 127.40M 43.70M 199.40M 144.50M 169.80M 180.30M 142.40M 191.10M 204.70M 230.30M
Capital Expenditure Ratio 126.45% 433.64% 102.16% 90.59% 67.67% 125.24% 123.03% 89.48% 100.44% 73.38%

Very Strong Dividend History over the past 10 years

CAE.TO has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests CAE.TO is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in CAD. Fiscal year ends in March
2007200820092010201120122013201420152016
Dividend Paid 9.80M 9.80M 29.60M 30.30M 37.90M 33.40M 37.10M 40.10M 46.30M 56.70M
divided by
Shares Outstanding 253.00M 254.60M 255.00M 255.80M 257.30M 258.22M 259.40M 261.92M - 269.20M
Dividend Paid Per Share 0.04 0.04 0.12 0.12 0.15 0.13 0.14 0.15 - 0.21
Price at Year End 12.22 7.58 8.49 11.19 9.89 10.02 13.49 15.09 15.41 18.78
Dividend Yield 0.31% 0.50% 1.36% 1.05% 1.48% 1.28% 1.05% 1.01% - 1.11%

No History of Stock Buybacks over the past 10 years

We're neutral on this. It's not necessarily good or bad that CAE.TO hasn't initiated a stock buyback.
Figures in CAD. Fiscal year ends in March
2007200820092010201120122013201420152016
Shares Outstanding 253.00M 254.60M 255.00M 255.80M 257.30M 258.22M 259.40M 261.92M - 269.20M
Stock Bought Back - -0.63% -0.16% -0.31% -0.58% -0.36% -0.45% -0.96% - -100.00%
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