Is North American Construction Group Ltd. (TSE:NOA) Trading At A 45% Discount?

North American Construction Group Ltd. (TSE:NOA) is a heavy civil construction and mining contractor provider operating primarily in Canada, the United States, and Australia. The company's services include mining and heavy civil construction, as well as mine management contracts. With a market capitalization of $825.5 million and an enterprise value of $1.10 billion, NOA is a significant player in its industry. However, the question remains: is NOA trading at a 45% discount?

To answer this question, we must first understand the company's valuation multiples and compare them to its historical averages and industry peers. According to the provided information, NOA has a trailing P/E ratio of 15.32 and a forward P/E ratio of 7.35. These ratios suggest that the company is trading at a relatively low valuation compared to its historical averages and industry peers.

To further analyze NOA's valuation, we can compare its EV/EBITDA ratio to its historical averages and industry peers. NOA's current EV/EBITDA ratio is 4.33, which is lower than its 1-year ago (3.89), 3-year average (4.12), and 5-year average (4.05) ratios. Additionally, NOA's EV/EBITDA ratio is significantly lower than the average ratio for the Construction & Engineering industry (around 7.00). This suggests that NOA may be relatively undervalued compared to its industry peers based on this valuation metric.

Another important aspect to consider is NOA's dividend yield. The company has a current dividend yield of 1.59%, which is relatively low compared to the average dividend yield of Canadian stocks. However, the company's dividend growth rate over the past year is 3.55%, indicating a modest increase in the dividend payout. The payout ratio is 24.30%, suggesting that the company is maintaining a healthy balance between reinvesting in the business and distributing profits to shareholders.

In conclusion, based on the provided information, North American Construction Group Ltd. (TSE:NOA) appears to be trading at a relatively low valuation compared to its historical averages and industry peers. The company's low P/E ratios, low EV/EBITDA ratio, and modest dividend growth rate suggest that NOA may be undervalued. However, it is essential to consider other factors, such as the company's earnings growth, revenue growth, and market conditions, to make a more informed decision about the stock's valuation.