METHODE ELECTRONICS INC (MEI)
US5915202007 - Common Stock
We assign a fundamental rating of 4 out of 10 to MEI. MEI was compared to 127 industry peers in the Electronic Equipment, Instruments & Components industry. MEI has only an average score on both its financial health and profitability. MEI does not seem to be growing, but still is valued expensively. Finally MEI also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
MEI had negative earnings in the past year.
MEI had a positive operating cash flow in the past year.
In the past 5 years MEI has always been profitable.
MEI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of -3.88%, MEI perfoms like the industry average, outperforming 42.86% of the companies in the same industry.
With a Return On Equity value of -6.93%, MEI perfoms like the industry average, outperforming 41.27% of the companies in the same industry.
MEI has a Return On Invested Capital (1.10%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for MEI is in line with the industry average of 9.44%.
The 3 year average ROIC (7.96%) for MEI is well above the current ROIC(1.10%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.88% | ||
| ROE | -6.93% | ||
| ROIC | 1.1% |
ROA(3y)6.86%
ROA(5y)7.4%
ROE(3y)10.9%
ROE(5y)12.35%
ROIC(3y)7.96%
ROIC(5y)8.84%
1.3 Margins
MEI's Profit Margin has been stable in the last couple of years.
The Operating Margin of MEI (1.41%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of MEI has declined.
MEI has a worse Gross Margin (18.24%) than 66.67% of its industry peers.
In the last couple of years the Gross Margin of MEI has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.41% | ||
| PM (TTM) | N/A | ||
| GM | 18.24% |
OM growth 3Y-16.63%
OM growth 5Y-9.58%
PM growth 3Y-18.45%
PM growth 5Y0.75%
GM growth 3Y-6.71%
GM growth 5Y-3.25%
2. Health
2.1 Basic Checks
MEI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
MEI has less shares outstanding than it did 1 year ago.
MEI has less shares outstanding than it did 5 years ago.
MEI has a worse debt/assets ratio than last year.
2.2 Solvency
MEI has an Altman-Z score of 2.15. This is not the best score and indicates that MEI is in the grey zone with still only limited risk for bankruptcy at the moment.
MEI has a Altman-Z score of 2.15. This is comparable to the rest of the industry: MEI outperforms 40.48% of its industry peers.
The Debt to FCF ratio of MEI is 17.17, which is on the high side as it means it would take MEI, 17.17 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 17.17, MEI perfoms like the industry average, outperforming 50.79% of the companies in the same industry.
MEI has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
MEI has a Debt to Equity ratio of 0.40. This is in the lower half of the industry: MEI underperforms 65.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 17.17 | ||
| Altman-Z | 2.15 |
ROIC/WACC0.14
WACC7.91%
2.3 Liquidity
A Current Ratio of 2.74 indicates that MEI has no problem at all paying its short term obligations.
With a Current ratio value of 2.74, MEI perfoms like the industry average, outperforming 57.14% of the companies in the same industry.
A Quick Ratio of 1.85 indicates that MEI should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.85, MEI perfoms like the industry average, outperforming 56.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.74 | ||
| Quick Ratio | 1.85 |
3. Growth
3.1 Past
MEI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -101.68%.
MEI shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -6.89% yearly.
Looking at the last year, MEI shows a decrease in Revenue. The Revenue has decreased by -2.46% in the last year.
The Revenue has been growing slightly by 5.37% on average over the past years.
EPS 1Y (TTM)-101.68%
EPS 3Y-12.69%
EPS 5Y-6.89%
EPS growth Q2Q-161.11%
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y4.83%
Revenue growth 5Y5.37%
Revenue growth Q2Q-7.35%
3.2 Future
The Earnings Per Share is expected to decrease by -22.37% on average over the next years. This is quite bad
MEI is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -2.44% yearly.
EPS Next Y-118.62%
EPS Next 2Y-68.37%
EPS Next 3Y-22.37%
EPS Next 5YN/A
Revenue Next Year-6.57%
Revenue Next 2Y-6.98%
Revenue Next 3Y-2.44%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
MEI reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
With a Price/Forward Earnings ratio of 55.08, MEI can be considered very expensive at the moment.
MEI's Price/Forward Earnings is on the same level as the industry average.
MEI's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.67.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 55.08 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MEI is valued a bit cheaper than the industry average as 79.37% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of MEI indicates a somewhat cheap valuation: MEI is cheaper than 73.02% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.93 | ||
| EV/EBITDA | 8.92 |
4.3 Compensation for Growth
MEI's earnings are expected to decrease with -22.37% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-68.37%
EPS Next 3Y-22.37%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.55%, MEI is a good candidate for dividend investing.
In the last 3 months the price of MEI has falen by -42.25%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
MEI's Dividend Yield is rather good when compared to the industry average which is at 1.78. MEI pays more dividend than 98.41% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, MEI pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.55% |
5.2 History
The dividend of MEI is nicely growing with an annual growth rate of 6.43%!
MEI has been paying a dividend for at least 10 years, so it has a reliable track record.
MEI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.43%
Div Incr Years0
Div Non Decr Years10
5.3 Sustainability
MEI has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-34.37%
EPS Next 2Y-68.37%
EPS Next 3Y-22.37%
METHODE ELECTRONICS INC
NYSE:MEI (4/25/2024, 12:55:49 PM)
11.96
-0.33 (-2.69%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryElectronic Equipment, Instruments & Components
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap423.26M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.55% |
Dividend Growth(5Y)
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Div Incr Years
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Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 55.08 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.88% | ||
| ROE | -6.93% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 1.41% | ||
| PM (TTM) | N/A | ||
| GM | 18.24% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.76
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.74 | ||
| Quick Ratio | 1.85 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-101.68%
EPS 3Y-12.69%
EPS 5Y
EPS growth Q2Q
EPS Next Y-118.62%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-2.46%
Revenue growth 3Y4.83%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
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