MEREN ENERGY INC (MER.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MER - CA5889141019 - Common Stock
2.14 CAD
+0.06 (+2.88%)
Overall MER gets a fundamental rating of 5 out of 10. We evaluated MER against 206 industry peers in the Oil, Gas & Consumable Fuels industry. While MER seems to be doing ok healthwise, there are quite some concerns on its profitability. MER is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
- In the past year MER was profitable.
- MER had a positive operating cash flow in the past year.
- In multiple years MER reported negative net income over the last 5 years.
- MER had a negative operating cash flow in each of the past 5 years.
1.2 Ratios
- With a decent Return On Assets value of 3.07%, MER is doing good in the industry, outperforming 73.30% of the companies in the same industry.
- With a decent Return On Equity value of 7.42%, MER is doing good in the industry, outperforming 63.11% of the companies in the same industry.
- The Return On Invested Capital of MER (2.79%) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.07% | ||
| ROE | 7.42% | ||
| ROIC | 2.79% |
ROA(3y)-14.31%
ROA(5y)-5.12%
ROE(3y)-16.13%
ROE(5y)-6.12%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- MER's Profit Margin of 18.05% is amongst the best of the industry. MER outperforms 80.58% of its industry peers.
- MER has a Operating Margin of 19.18%. This is in the better half of the industry: MER outperforms 75.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.18% | ||
| PM (TTM) | 18.05% | ||
| GM | N/A |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- The number of shares outstanding for MER has been reduced compared to 1 year ago.
- MER has less shares outstanding than it did 5 years ago.
- Compared to 1 year ago, MER has a worse debt to assets ratio.
2.2 Solvency
- Based on the Altman-Z score of 0.32, we must say that MER is in the distress zone and has some risk of bankruptcy.
- The Altman-Z score of MER (0.32) is worse than 60.68% of its industry peers.
- The Debt to FCF ratio of MER is 3.02, which is a good value as it means it would take MER, 3.02 years of fcf income to pay off all of its debts.
- With an excellent Debt to FCF ratio value of 3.02, MER belongs to the best of the industry, outperforming 84.95% of the companies in the same industry.
- A Debt/Equity ratio of 0.34 indicates that MER is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.34, MER is in line with its industry, outperforming 58.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 3.02 | ||
| Altman-Z | 0.32 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
- MER has a Current Ratio of 1.14. This is a normal value and indicates that MER is financially healthy and should not expect problems in meeting its short term obligations.
- MER has a better Current ratio (1.14) than 66.02% of its industry peers.
- A Quick Ratio of 0.86 indicates that MER may have some problems paying its short term obligations.
- MER's Quick ratio of 0.86 is fine compared to the rest of the industry. MER outperforms 61.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.14 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
- MER shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 115.94%, which is quite impressive.
- Measured over the past years, MER shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -44.07% on average per year.
EPS 1Y (TTM)115.94%
EPS 3Y-44.07%
EPS 5YN/A
EPS Q2Q%-83.33%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%N/A
3.2 Future
- MER is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 78.37% yearly.
- MER is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 30.67% yearly.
EPS Next Y405%
EPS Next 2Y138.73%
EPS Next 3Y78.37%
EPS Next 5YN/A
Revenue Next Year162.71%
Revenue Next 2Y52.39%
Revenue Next 3Y30.67%
Revenue Next 5YN/A
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.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 23.78, MER is valued on the expensive side.
- MER's Price/Earnings ratio is a bit cheaper when compared to the industry. MER is cheaper than 62.14% of the companies in the same industry.
- When comparing the Price/Earnings ratio of MER to the average of the S&P500 Index (28.60), we can say MER is valued inline with the index average.
- Based on the Price/Forward Earnings ratio of 3.95, the valuation of MER can be described as very cheap.
- 97.57% of the companies in the same industry are more expensive than MER, based on the Price/Forward Earnings ratio.
- MER's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.78 | ||
| Fwd PE | 3.95 |
4.2 Price Multiples
- Based on the Price/Free Cash Flow ratio, MER is valued cheaply inside the industry as 87.86% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.83 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- MER's earnings are expected to grow with 78.37% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.06
PEG (5Y)N/A
EPS Next 2Y138.73%
EPS Next 3Y78.37%
5. Dividend
5.1 Amount
- MER has a Yearly Dividend Yield of 3.48%.
- Compared to an average industry Dividend Yield of 3.29, MER pays a bit more dividend than its industry peers.
- MER's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.48% |
5.2 History
- MER has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years2
5.3 Sustainability
- MER pays out 114.98% of its income as dividend. This is not a sustainable payout ratio.
DP114.98%
EPS Next 2Y138.73%
EPS Next 3Y78.37%
MEREN ENERGY INC / MER.CA FAQ
Can you provide the ChartMill fundamental rating for MEREN ENERGY INC?
ChartMill assigns a fundamental rating of 5 / 10 to MER.CA.
What is the valuation status of MEREN ENERGY INC (MER.CA) stock?
ChartMill assigns a valuation rating of 7 / 10 to MEREN ENERGY INC (MER.CA). This can be considered as Undervalued.
What is the profitability of MER stock?
MEREN ENERGY INC (MER.CA) has a profitability rating of 3 / 10.
What is the earnings growth outlook for MEREN ENERGY INC?
The Earnings per Share (EPS) of MEREN ENERGY INC (MER.CA) is expected to grow by 405% in the next year.
Can you provide the dividend sustainability for MER stock?
The dividend rating of MEREN ENERGY INC (MER.CA) is 3 / 10 and the dividend payout ratio is 114.98%.