Stock Analysis: Best Dividend Stocks

Fundamental Rating

Overall MG gets a fundamental rating of 5 out of 10. We evaluated MG against 4 industry peers in the Automobile Components industry. Both the profitability and the financial health of MG get a neutral evaluation. Nothing too spectacular is happening here. MG is valued correctly, but it does not seem to be growing. Finally MG also has an excellent dividend rating. These ratings could make MG a good candidate for dividend investing.

1. Profitability

1.1 Basic Checks

MG had positive earnings in the past year.

MG had a positive operating cash flow in the past year.

In the past 5 years MG has always been profitable.

Each year in the past 5 years MG had a positive operating cash flow.

1.2 Ratios

With a decent Return On Assets value of 3.25%, MG is doing good in the industry, outperforming 75.00% of the companies in the same industry.

MG has a better Return On Equity (8.76%) than 100.00% of its industry peers.

With an excellent Return On Invested Capital value of 8.06%, MG belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.

The Average Return On Invested Capital over the past 3 years for MG is in line with the industry average of 7.35%.

The last Return On Invested Capital (8.06%) for MG is above the 3 year average (7.69%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	3.25%
ROE	8.76%
ROIC	8.06%

ROA(3y)3.05%

ROA(5y)3.4%

ROE(3y)8.13%

ROE(5y)8.77%

ROIC(3y)7.69%

ROIC(5y)7.35%

1.3 Margins

MG has a Profit Margin (2.36%) which is comparable to the rest of the industry.

In the last couple of years the Profit Margin of MG has declined.

With a Operating Margin value of 4.79%, MG is not doing good in the industry: 75.00% of the companies in the same industry are doing better.

In the last couple of years the Operating Margin of MG has declined.

With a Gross Margin value of 13.54%, MG perfoms like the industry average, outperforming 50.00% of the companies in the same industry.

MG's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	4.79%
PM (TTM)	2.36%
GM	13.54%

OM growth 3Y-3.12%

OM growth 5Y-4.35%

PM growth 3Y-17.39%

PM growth 5Y-12.05%

GM growth 3Y-1.57%

GM growth 5Y-0.26%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MG is still creating some value.

Compared to 1 year ago, MG has less shares outstanding

Compared to 5 years ago, MG has less shares outstanding

The debt/assets ratio for MG has been reduced compared to a year ago.

2.2 Solvency

MG has an Altman-Z score of 2.37. This is not the best score and indicates that MG is in the grey zone with still only limited risk for bankruptcy at the moment.

The Altman-Z score of MG (2.37) is comparable to the rest of the industry.

MG has a debt to FCF ratio of 3.51. This is a good value and a sign of high solvency as MG would need 3.51 years to pay back of all of its debts.

Looking at the Debt to FCF ratio, with a value of 3.51, MG is in line with its industry, outperforming 50.00% of the companies in the same industry.

A Debt/Equity ratio of 0.38 indicates that MG is not too dependend on debt financing.

The Debt to Equity ratio of MG (0.38) is better than 75.00% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.38
Debt/FCF	3.51
Altman-Z	2.37

ROIC/WACC1.02

WACC7.92%

2.3 Liquidity

MG has a Current Ratio of 1.08. This is a normal value and indicates that MG is financially healthy and should not expect problems in meeting its short term obligations.

MG has a worse Current ratio (1.08) than 75.00% of its industry peers.

MG has a Quick Ratio of 1.08. This is a bad value and indicates that MG is not financially healthy enough and could expect problems in meeting its short term obligations.

MG has a Quick ratio (0.74) which is in line with its industry peers.

		Industry Rank	Sector Rank
Current Ratio	1.08
Quick Ratio	0.74

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

MG shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by 0.00%.

MG shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.22% yearly.

The Revenue has been growing slightly by 0.09% in the past year.

The Revenue has been growing slightly by 1.67% on average over the past years.

EPS 1Y (TTM)0%

EPS 3Y1.79%

EPS 5Y-2.22%

EPS Q2Q%27.07%

Revenue 1Y (TTM)0.09%

Revenue growth 3Y5.73%

Revenue growth 5Y1.67%

Sales Q2Q%1.66%

3.2 Future

MG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.22% yearly.

The Revenue is expected to grow by 0.06% on average over the next years.

EPS Next Y-7.89%

EPS Next 2Y7.86%

EPS Next 3Y9.2%

EPS Next 5Y12.22%

Revenue Next Year-7.27%

Revenue Next 2Y-1.94%

Revenue Next 3Y-0.59%

Revenue Next 5Y0.06%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 6.41, which indicates a rather cheap valuation of MG.

The rest of the industry has a similar Price/Earnings ratio as MG.

The average S&P500 Price/Earnings ratio is at 27.85. MG is valued rather cheaply when compared to this.

The Price/Forward Earnings ratio is 6.96, which indicates a rather cheap valuation of MG.

75.00% of the companies in the same industry are cheaper than MG, based on the Price/Forward Earnings ratio.

Compared to an average S&P500 Price/Forward Earnings ratio of 20.77, MG is valued rather cheaply.

		Industry Rank	Sector Rank
PE	6.41
Fwd PE	6.96

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as MG.

Based on the Price/Free Cash Flow ratio, MG is valued a bit more expensive than the industry average as 75.00% of the companies are valued more cheaply.

		Industry Rank	Sector Rank
P/FCF	6.73
EV/EBITDA	3.65

4.3 Compensation for Growth

The decent profitability rating of MG may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)N/A

EPS Next 2Y7.86%

EPS Next 3Y9.2%

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5. Dividend

5.1 Amount

MG has a Yearly Dividend Yield of 5.23%, which is a nice return.

Compared to an average industry Dividend Yield of 4.37, MG pays a bit more dividend than its industry peers.

MG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.

		Industry Rank	Sector Rank
Dividend Yield	5.23%

5.2 History

The dividend of MG has a limited annual growth rate of 5.84%.

MG has paid a dividend for at least 10 years, which is a reliable track record.

MG has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.

Dividend Growth(5Y)5.84%

Div Incr Years15

Div Non Decr Years15

5.3 Sustainability

MG pays out 53.42% of its income as dividend. This is a bit on the high side, but may be sustainable.

MG's earnings are growing more than its dividend. This makes the dividend growth sustainable.

DP53.42%

EPS Next 2Y7.86%

EPS Next 3Y9.2%

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Toronto Stock Exchange / Consumer Discretionary / Automobile Components

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

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2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

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3. Growth

3.1 Past

3.2 Future

3.3 Evolution

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4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

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5. Dividend

5.1 Amount

5.2 History

5.3 Sustainability

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