METHANEX CORP (MX.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MX - CA59151K1084 - Common Stock
66.14 CAD
-0.71 (-1.06%)
We assign a fundamental rating of 6 out of 10 to MX. MX was compared to 27 industry peers in the Chemicals industry. MX has an excellent profitability rating, but there are some minor concerns on its financial health. A decent growth rate in combination with a cheap valuation! Better keep an eye on MX. These ratings could make MX a good candidate for value investing.
1. Profitability
1.1 Basic Checks
- MX had positive earnings in the past year.
- MX had a positive operating cash flow in the past year.
- Of the past 5 years MX 4 years were profitable.
- In the past 5 years MX always reported a positive cash flow from operatings.
1.2 Ratios
- MX's Return On Assets of 2.84% is amongst the best of the industry. MX outperforms 81.48% of its industry peers.
- Looking at the Return On Equity, with a value of 8.31%, MX belongs to the top of the industry, outperforming 85.19% of the companies in the same industry.
- MX has a better Return On Invested Capital (5.46%) than 85.19% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for MX is below the industry average of 7.57%.
- The 3 year average ROIC (4.64%) for MX is below the current ROIC(5.46%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.84% | ||
| ROE | 8.31% | ||
| ROIC | 5.46% |
ROA(3y)3.51%
ROA(5y)3.14%
ROE(3y)11.2%
ROE(5y)9.72%
ROIC(3y)4.64%
ROIC(5y)N/A
1.3 Margins
- MX's Profit Margin of 5.99% is amongst the best of the industry. MX outperforms 88.89% of its industry peers.
- In the last couple of years the Profit Margin of MX has grown nicely.
- MX's Operating Margin of 14.45% is amongst the best of the industry. MX outperforms 81.48% of its industry peers.
- In the last couple of years the Operating Margin of MX has grown nicely.
- MX's Gross Margin of 25.93% is fine compared to the rest of the industry. MX outperforms 62.96% of its industry peers.
- In the last couple of years the Gross Margin of MX has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.45% | ||
| PM (TTM) | 5.99% | ||
| GM | 25.93% |
OM growth 3Y-18.5%
OM growth 5Y15.49%
PM growth 3Y-26.11%
PM growth 5Y10.52%
GM growth 3Y0.81%
GM growth 5Y5.2%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so MX is destroying value.
- MX has about the same amout of shares outstanding than it did 1 year ago.
- The number of shares outstanding for MX has been reduced compared to 5 years ago.
- Compared to 1 year ago, MX has a worse debt to assets ratio.
2.2 Solvency
- MX has an Altman-Z score of 1.60. This is a bad value and indicates that MX is not financially healthy and even has some risk of bankruptcy.
- MX has a Altman-Z score of 1.60. This is in the better half of the industry: MX outperforms 66.67% of its industry peers.
- MX has a debt to FCF ratio of 3.90. This is a good value and a sign of high solvency as MX would need 3.90 years to pay back of all of its debts.
- MX has a better Debt to FCF ratio (3.90) than 96.30% of its industry peers.
- A Debt/Equity ratio of 1.34 is on the high side and indicates that MX has dependencies on debt financing.
- MX has a Debt to Equity ratio of 1.34. This is in the lower half of the industry: MX underperforms 74.07% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.34 | ||
| Debt/FCF | 3.9 | ||
| Altman-Z | 1.6 |
ROIC/WACC0.51
WACC10.78%
2.3 Liquidity
- MX has a Current Ratio of 2.09. This indicates that MX is financially healthy and has no problem in meeting its short term obligations.
- MX has a Current ratio of 2.09. This is in the better half of the industry: MX outperforms 66.67% of its industry peers.
- MX has a Quick Ratio of 1.33. This is a normal value and indicates that MX is financially healthy and should not expect problems in meeting its short term obligations.
- With a decent Quick ratio value of 1.33, MX is doing good in the industry, outperforming 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.09 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 19.00% over the past year.
- MX shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 31.95% yearly.
- The Revenue has decreased by -3.36% in the past year.
- MX shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.53% yearly.
EPS 1Y (TTM)19%
EPS 3Y-14.87%
EPS 5Y31.95%
EPS Q2Q%-95.04%
Revenue 1Y (TTM)-3.36%
Revenue growth 3Y-5.55%
Revenue growth 5Y2.53%
Sales Q2Q%-0.79%
3.2 Future
- MX is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -8.42% yearly.
- The Revenue is expected to grow by 3.53% on average over the next years.
EPS Next Y-13.98%
EPS Next 2Y-3.76%
EPS Next 3Y0.05%
EPS Next 5Y-8.42%
Revenue Next Year-2.72%
Revenue Next 2Y4.64%
Revenue Next 3Y3.53%
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.
- When comparing the Revenue 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 13.42, MX is valued correctly.
- MX's Price/Earnings ratio is rather cheap when compared to the industry. MX is cheaper than 92.59% of the companies in the same industry.
- MX's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.30.
- The Price/Forward Earnings ratio is 13.90, which indicates a correct valuation of MX.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of MX indicates a rather cheap valuation: MX is cheaper than 85.19% of the companies listed in the same industry.
- MX is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.42 | ||
| Fwd PE | 13.9 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MX is valued cheaper than 85.19% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, MX is valued cheaper than 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.99 | ||
| EV/EBITDA | 7.46 |
4.3 Compensation for Growth
- The excellent profitability rating of MX may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.42
EPS Next 2Y-3.76%
EPS Next 3Y0.05%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.64%, MX has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.26, MX pays a bit more dividend than its industry peers.
- MX's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
5.2 History
- The dividend of MX decreases each year by -12.05%.
- MX has paid a dividend for at least 10 years, which is a reliable track record.
- MX has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-12.05%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
- MX pays out 24.20% of its income as dividend. This is a sustainable payout ratio.
- The Dividend Rate of MX has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP24.2%
EPS Next 2Y-3.76%
EPS Next 3Y0.05%
METHANEX CORP / MX.CA FAQ
What is the fundamental rating for MX stock?
ChartMill assigns a fundamental rating of 6 / 10 to MX.CA.
What is the valuation status for MX stock?
ChartMill assigns a valuation rating of 7 / 10 to METHANEX CORP (MX.CA). This can be considered as Undervalued.
What is the profitability of MX stock?
METHANEX CORP (MX.CA) has a profitability rating of 8 / 10.
What is the financial health of METHANEX CORP (MX.CA) stock?
The financial health rating of METHANEX CORP (MX.CA) is 5 / 10.
What is the earnings growth outlook for METHANEX CORP?
The Earnings per Share (EPS) of METHANEX CORP (MX.CA) is expected to decline by -13.98% in the next year.