Aecon Group Inc (ARE.TO) Buy, Sell or Hold

Aecon Group Inc (ARE.TO)

52.95

-0.03 (0.06%)

as of Nov 6, 2026, 9:00:00 pm Market Closed.

426 watching

TOP PICK

Finally some good news for them--sold 49.9% stake in the Bermuda airport (finally), and they just sold their Ontario road construction business. Are in much stronger financial position. Four legacy contracts at a fixed price will run out end-2023/early-2024. After that will be strong margin expansion. Pays around a 6% dividend and trades at a good PE vs. peers.

(Analysts’ price target is $16.09)

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TOP PICK

They had fixed-cost contracts with cost overruns and shares fell last year. Turned around this year, though, by selling stake in a Bermuda airport and road-building business. Demand for their work continues to grow. Likes this long-term. Yields 5.6%. Good long-term. Those fixed-cost contracts will recover in time.

(Analysts’ price target is $16.20)

RISKY

The engineering and construction sector has really been impacted by cost inflation. Lots of problems with fixed-price contracts, will take time to go through the system, and so the repricing cycle is longer. Be cautious. Layer in, don't weight over 5%. You don't want to be all in if sentiment is going to tick down.

PAST TOP PICK

(A Top Pick Feb 01/22, Down 35%)

Still mired in cost overruns that's lasting longer than he expected. That said, roads still need to be built and ARE will benefit. Valuation has been punished. Look at Stantec instead in this space, but he is holding onto ARE. He expects a recovery.

PAST TOP PICK

(A Top Pick Jan 26/22, Down 30%)

Cost overruns on projects entered into a decade ago, a much different economic environment. Nuclear expertise. Would benefit from increased mining development. At steal at these levels. Nice total return for 5-10 years. Yield is 7%, shouldn't have to cut.

DON'T BUY

Am engineering construction company, so margins are lower than WSP's or Stantec's. Have suffered cost overruns and project lays, like many in their sector. They have a backlog, but you don't know the quality of if it. Are better opportunities elsewhere. Doesn't like the sector.

RISKY

Owns it in the aggressive equity platform. It is at the support level of 2015 but may not bounce back. It is a buy only for risk takers.

DON'T BUY

Tough year for the entire space. A lot has to do with fixed-price contracts. Rampant inflation hits profitability. Better opportunities out there. Very well run.

PAST TOP PICK

(A Top Pick Feb 01/22, Down 45%) It has had cost over-runs and some legal suits. It is looking for recovery in some projects - two should be completed next year. Since there are inflationary pressures, it will de-emphasize fixed price contracts which make up about 60% of its backlog. It is quite inexpensive since infrastructure spending should increase at some point.

DON'T BUY

It is more of an engineering and construction company rather than a consulting one. He prefers the consulting type such as Stantec and WSP since there is less risk.

BUY

~7% dividend yield is sustainable. Several good quarters in a row (aside from last quarter). Positive on business in the long term (infrastructure business not going anywhere) Nuclear business will be valuable going forward.

COMMENT

Not that familiar with the company but is with the industry. Prefers WSP and Stantec for global infrastructure rather than engineering construction.

HOLD

Top Pick in February, and he hasn't changed his mind. Hit by rising rates, valuation down. Projects on the go, solid backlog. Bermuda project hasn't worked that well and won't until tourism resumes. Trading under book value.

HOLD

Is a good long term investment (~ 5 year) with large infrastructure projects going forward. Once interest rates cool and inflation decreases, expects increased spending in building. Would advise holding the stock if already hold shares.

COMMENT

Question was on comparing Aecon to Bird. They have good yields of 5%. Backlogs are not as meaningful in this environment. Construction costs are up and there are still supply chain issues. Bird is in a better situation since it has fewer fixed costs.

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Aecon Group Inc (ARE.TO)