CA - Aecon: Like Brookfield? Love The Stock

2024-04-07 23:48:21 ET

Summary

• Aecon is a growing Canadian player in the Infrastructure space, with a focus on renewables.
• The company is positioned to benefit from key macro trends and offers a steep discount to peers a pristine balance sheet, and strong liquidity.
• 2023 results were challenging due to pricing mismatches, but AEGXF managed to improve operating profit and cash flow.
• The outlook is positive, with progress made on major contracts and a strong focus on sustainability. Valuation and risks should be considered.

There is a lot to love about Aecon (ARE:CA) (AEGXF), but it has been a risky play - does the current price justify the risk?

Aecon is a growing Canadian player in the Infrastructure space, with a heavy focus on renewables. The business model has a similar profile to market darling Brookfield ( BN ), especially Brookfield Infrastructure Partners ( BIP ) and Brookfield Renewable Partners ( BEP ). The underlying business is very strong, with tailwinds coming from investment in transportation infrastructure and nuclear energy. Debt is very low, recently halving to just 11% of capital....

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