MERCER INTERNATIONAL INC (MERC) Stock Fundamental Analysis
NASDAQ:MERC - Nasdaq - US5880561015 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to MERC. MERC was compared to 9 industry peers in the Paper & Forest Products industry. MERC has a bad profitability rating. Also its financial health evaluation is rather negative. MERC is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
MERC had negative earnings in the past year.
In the past year MERC had a positive cash flow from operations.
In multiple years MERC reported negative net income over the last 5 years.
MERC had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a Return On Assets value of -3.89%, MERC is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
With a Return On Equity value of -20.76%, MERC is not doing good in the industry: 77.78% of the companies in the same industry are doing better.
The Return On Invested Capital of MERC (2.54%) is better than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.89% | ||
| ROE | -20.76% | ||
| ROIC | 2.54% |
ROA(3y)-1.26%
ROA(5y)0.54%
ROE(3y)-9.49%
ROE(5y)-1.34%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a decent Operating Margin value of 3.28%, MERC is doing good in the industry, outperforming 66.67% of the companies in the same industry.
MERC's Operating Margin has declined in the last couple of years.
MERC has a Gross Margin of 9.01%. This is in the lower half of the industry: MERC underperforms 66.67% of its industry peers.
MERC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.28% | ||
| PM (TTM) | N/A | ||
| GM | 9.01% |
OM growth 3Y-40.69%
OM growth 5Y-5.03%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-25.62%
GM growth 5Y-0.06%
2. Health
2.1 Basic Checks
MERC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
MERC has more shares outstanding than it did 1 year ago.
The number of shares outstanding for MERC has been increased compared to 5 years ago.
Compared to 1 year ago, MERC has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.48, we must say that MERC is in the distress zone and has some risk of bankruptcy.
MERC has a Altman-Z score (1.48) which is in line with its industry peers.
The Debt to FCF ratio of MERC is 49.66, which is on the high side as it means it would take MERC, 49.66 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 49.66, MERC is doing worse than 66.67% of the companies in the same industry.
A Debt/Equity ratio of 3.44 is on the high side and indicates that MERC has dependencies on debt financing.
MERC has a Debt to Equity ratio of 3.44. This is amonst the worse of the industry: MERC underperforms 88.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.44 | ||
| Debt/FCF | 49.66 | ||
| Altman-Z | 1.48 |
ROIC/WACC0.39
WACC6.52%
2.3 Liquidity
A Current Ratio of 3.25 indicates that MERC has no problem at all paying its short term obligations.
MERC's Current ratio of 3.25 is amongst the best of the industry. MERC outperforms 100.00% of its industry peers.
A Quick Ratio of 1.98 indicates that MERC should not have too much problems paying its short term obligations.
MERC's Quick ratio of 1.98 is amongst the best of the industry. MERC outperforms 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.25 | ||
| Quick Ratio | 1.98 |
3. Growth
3.1 Past
The earnings per share for MERC have decreased by -3.16% in the last year.
Looking at the last year, MERC shows a small growth in Revenue. The Revenue has grown by 2.48% in the last year.
Measured over the past years, MERC shows a small growth in Revenue. The Revenue has been growing by 4.70% on average per year.
EPS 1Y (TTM)-3.16%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-163.27%
Revenue 1Y (TTM)2.48%
Revenue growth 3Y4.25%
Revenue growth 5Y4.7%
Sales Q2Q%-9.18%
3.2 Future
MERC is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 22.89% yearly.
The Revenue is expected to grow by 10.02% on average over the next years. This is quite good.
EPS Next Y-113.56%
EPS Next 2Y44.98%
EPS Next 3Y89.87%
EPS Next 5Y22.89%
Revenue Next Year-0.05%
Revenue Next 2Y2.99%
Revenue Next 3Y10.02%
Revenue Next 5YN/A
3.3 Evolution
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings Ratio is negative for MERC. In the last year negative earnings were reported.
The Price/Forward Earnings ratio is 77.70, which means the current valuation is very expensive for MERC.
The rest of the industry has a similar Price/Forward Earnings ratio as MERC.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.28, MERC is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 77.7 |
4.2 Price Multiples
MERC's Enterprise Value to EBITDA ratio is in line with the industry average.
MERC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. MERC is cheaper than 77.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.96 | ||
| EV/EBITDA | 6.56 |
4.3 Compensation for Growth
MERC's earnings are expected to grow with 89.87% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y44.98%
EPS Next 3Y89.87%
5. Dividend
5.1 Amount
MERC has a Yearly Dividend Yield of 9.01%, which is a nice return.
Compared to an average industry Dividend Yield of 3.66, MERC pays a better dividend. On top of this MERC pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, MERC pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.01% |
5.2 History
The dividend of MERC decreases each year by -11.04%.
MERC has paid a dividend for at least 10 years, which is a reliable track record.
MERC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-11.04%
Div Incr Years1
Div Non Decr Years3
5.3 Sustainability
MERC has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-22.1%
EPS Next 2Y44.98%
EPS Next 3Y89.87%
3.17
-0.07 (-2.16%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryPaper & Forest Products
Earnings (Last)
Earnings (Next)
Inst Owners49.89%
Inst Owner Change0.05%
Ins Owners1.28%
Ins Owner Change3.24%
Market Cap211.98M
Analysts48.89
Price Target3.83 (20.82%)
Short Float %2.54%
Short Ratio1.67
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.01% |
Yearly Dividend0.3
Dividend Growth(5Y)-11.04%
DP-22.1%
Div Incr Years1
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)196.08%
Min EPS beat(2)-120.58%
Max EPS beat(2)512.75%
EPS beat(4)1
Avg EPS beat(4)-7.26%
Min EPS beat(4)-405.89%
Max EPS beat(4)512.75%
EPS beat(8)3
Avg EPS beat(8)5.2%
EPS beat(12)5
Avg EPS beat(12)-28.82%
EPS beat(16)8
Avg EPS beat(16)-18.99%
Revenue beat(2)0
Avg Revenue beat(2)-2.96%
Min Revenue beat(2)-3.75%
Max Revenue beat(2)-2.16%
Revenue beat(4)2
Avg Revenue beat(4)-0.55%
Min Revenue beat(4)-3.75%
Max Revenue beat(4)2.23%
Revenue beat(8)5
Avg Revenue beat(8)1.93%
Revenue beat(12)8
Avg Revenue beat(12)2.55%
Revenue beat(16)10
Avg Revenue beat(16)2.04%
PT rev (1m)0%
PT rev (3m)-25.49%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1150%
EPS NY rev (1m)0%
EPS NY rev (3m)-4087.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.91%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | 77.7 | ||
| P/S | 0.11 | ||
| P/FCF | 6.96 | ||
| P/OCF | 1.82 | ||
| P/B | 0.48 | ||
| P/tB | 0.55 | ||
| EV/EBITDA | 6.56 |
EPS(TTM)-1.63
EYN/A
EPS(NY)0.04
Fwd EY1.29%
FCF(TTM)0.46
FCFY14.37%
OCF(TTM)1.74
OCFY54.92%
SpS29.86
BVpS6.54
TBVpS5.79
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.89% | ||
| ROE | -20.76% | ||
| ROCE | 3.21% | ||
| ROIC | 2.54% | ||
| ROICexc | 2.79% | ||
| ROICexgc | 2.86% | ||
| OM | 3.28% | ||
| PM (TTM) | N/A | ||
| GM | 9.01% | ||
| FCFM | 1.53% |
ROA(3y)-1.26%
ROA(5y)0.54%
ROE(3y)-9.49%
ROE(5y)-1.34%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-39.32%
ROICexcg growth 5Y-5.08%
ROICexc growth 3Y-39.31%
ROICexc growth 5Y-4.89%
OM growth 3Y-40.69%
OM growth 5Y-5.03%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-25.62%
GM growth 5Y-0.06%
F-Score5
Asset Turnover0.85
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.44 | ||
| Debt/FCF | 49.66 | ||
| Debt/EBITDA | 6.36 | ||
| Cap/Depr | 50.33% | ||
| Cap/Sales | 4.3% | ||
| Interest Coverage | 0.68 | ||
| Cash Conversion | 49.28% | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.25 | ||
| Quick Ratio | 1.98 | ||
| Altman-Z | 1.48 |
F-Score5
WACC6.52%
ROIC/WACC0.39
Cap/Depr(3y)84.22%
Cap/Depr(5y)87.15%
Cap/Sales(3y)6.27%
Cap/Sales(5y)6.66%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-3.16%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-163.27%
EPS Next Y-113.56%
EPS Next 2Y44.98%
EPS Next 3Y89.87%
EPS Next 5Y22.89%
Revenue 1Y (TTM)2.48%
Revenue growth 3Y4.25%
Revenue growth 5Y4.7%
Sales Q2Q%-9.18%
Revenue Next Year-0.05%
Revenue Next 2Y2.99%
Revenue Next 3Y10.02%
Revenue Next 5YN/A
EBIT growth 1Y246.72%
EBIT growth 3Y-38.17%
EBIT growth 5Y-0.57%
EBIT Next Year998.18%
EBIT Next 3Y206.67%
EBIT Next 5Y114.48%
FCF growth 1Y-51.63%
FCF growth 3Y-34.97%
FCF growth 5Y-44.48%
OCF growth 1Y-51.94%
OCF growth 3Y-20.89%
OCF growth 5Y-18.07%