Very interesting company actually. in the last 6 quarters, it's beat earnings estimates 5 of 6 times. And 3 of those beats it smashed expectations out of the park.
Because of the pandemic, the stock is trading at significant discounts to 5 year historical averages. 35% in price to sales, 88% in trailing earnings and 82% in forward earnings.
However, the discounts are because of the environment they're currently in. In fact, management stated this is the toughest operating environment they've ever experienced. Revenue dropped 60% last quarter, adjusted EBITDA down 14%.
The company has a ton of room to grow their dividend. It looks like they're paying a $0.16 dividend on over $1.50 in earnings. This is a good sign. However, I'm curious to see if they keep raising the dividend, or if they stop it to preserve liquidity.
Speaking of liquidity, they've slashed capital spending by a significant amount, which will more than likely stunt growth in the short term. They guided down to $75 million in capital spending in 2020 on the low end, $40 million of which they spent in the first quarter of 2020.
They have a backlog of nearly $1 billion, but the concerning thing is the backlog is shrinking quite a bit, as back in September of 2019 it sat at $1.308 billion. To give you an idea of how bleak it's been this quarter as well, they generated only $22 million in revenue this quarter from that backlog, whereas the quarter previous it was nearly $140 million.
Overall though, if I had room in my portfolio for a construction play, they'd be on my radar. This is a cheap company right now. Analysts actually have just under 50% upside marked on the stock right now.
But keep in mind, it's cheap for a reason. An investment in NOA will require patience, as its primary market is the Canadian oil and gas sector, which is facing economic climates its never seen before.