North American Construction Group Ltd. (NYSE: NOA)

Sector: Energy Industry: Oil & Gas Equipment & Services CIK: 0001368519
Market Cap 463.35 Mn
P/B 1.36
P/E 16.60
P/S 0.50
ROIC (Qtr) 8.28
Div Yield % 1.80
Rev 1y % (Qtr) 8.99
Total Debt (Qtr) 660.02 Mn
Debt/Equity (Qtr) 1.93
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About

Investment thesis

Bull case

  • Operating cash flow of 222.07M provides strong 101.31x coverage of stock compensation 2.19M, indicating sustainable incentive practices.
  • Strong operating cash flow of 222.07M provides 5.83x coverage of SG&A expenses 38.07M, showing efficient operational cost management.
  • Tangible assets of 1.35B provide exceptional 81.35x coverage of deferred revenue 16.58M, showing strong service capability backing.
  • Operating cash flow of 222.07M provides strong 13.40x coverage of deferred revenue 16.58M, indicating service delivery capability.
  • Operating cash flow of 222.07M provides strong 247.54x coverage of operating expenses 897101.45, showing operational efficiency.

Bear case

  • Operating cash flow of 222.07M barely covers its investment activities of (222.63M), with a coverage ratio of -1, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 222.07M provides thin coverage of dividend payments of (9.20M) with a -24.15 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 73.65M provide limited coverage of acquisition spending of (2.13M), which is -34.50x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 127.49M relative to inventory of 53.79M (2.37 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 1.58M provides weak coverage of capital expenditures of 220.50M, with a 0.01 ratio suggesting additional external financing needs for growth initiatives.

Equity Method Investment, Nonconsolidated Investee Breakdown of Revenue (2024)

Peer comparison

Companies in the Oil & Gas Equipment & Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SLB Slb Limited/Nv 59.56 Bn 20.77 2.67 11.64 Bn
2 BKR Baker Hughes Co 59.13 Bn 22.85 2.13 6.09 Bn
3 FTI TechnipFMC plc 28.99 Bn 127.65 1.96 1.34 Bn
4 HAL Halliburton Co 28.83 Bn 22.47 1.30 8.13 Bn
5 WFRD Weatherford International plc 7.39 Bn 17.15 1.50 1.64 Bn
6 NOV NOV Inc. 7.09 Bn 48.90 0.81 2.34 Bn
7 VAL Valaris Ltd 6.32 Bn 15.83 2.61 1.09 Bn
8 KGS Kodiak Gas Services, Inc. 4.56 Bn 91.00 3.58 2.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.57 1.17
EV to Cash from Ops. EV/CFO 3.49 -3.30
EV to Debt EV to Debt 1.17 10.99
EV to EBIT EV/EBIT 9.58 4.49
EV to EBITDA EV/EBITDA 3.33 6.54
EV to Free Cash Flow [EV/FCF] EV/FCF 491.67 31.31
EV to Market Cap EV to Market Cap 1.67 1.36
EV to Revenue EV/Rev 0.83 2.02
Price to Book Value [P/B] P/B 1.36 1.73
Price to Earnings [P/E] P/E 16.60 20.20
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.20 0.42
Dividend Payout Ratio % Div Payout % (Qtr) 29.90 5.49
Dividend per Basic Share Div per Share (Qtr) 0.29 0.26
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 386.67 6.68
Interest Coverage Int. cover (Qtr) 1.95 -10.19
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.12 -37.90
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 28.96 1,334.16
Dividend Growth (1y) % Div 1y % (Qtr) -15.70 4.06
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -20.50 -12.71
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -10.93 19.66
EBIT Growth (1y) % EBIT 1y % (Qtr) -24.00 -26.68
EBT Growth (1y) % EBT 1y % (Qtr) -37.60 39.97
EPS Growth (1y) % EPS 1y % (Qtr) -39.14 27.30
FCF Growth (1y) % FCF 1y % (Qtr) -76.15 -867.31
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -30.74 5.49
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.50 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.02 0.10
Cash Ratio Cash Ratio (Qtr) 0.25 0.62
Current Ratio Curr Ratio (Qtr) 0.91 2.25
Debt to Equity Ratio Debt/Equity (Qtr) 1.93 0.88
Interest Cover Ratio Int Coverage (Qtr) 1.95 -10.19
Times Interest Earned Times Interest Earned (Qtr) 1.95 -10.19
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 25.00 16.47
EBIT Margin % EBIT Margin % (Qtr) 12.00 -0.62
EBT Margin % EBT Margin % (Qtr) 4.23 4.39
Gross Margin % Gross Margin % (Qtr) 12.90 30.41
Net Profit Margin % Net Margin % (Qtr) 3.00 2.67