Followers | 132 |
Posts | 10271 |
Boards Moderated | 1 |
Alias Born | 10/02/2009 |
Sunday, April 01, 2012 12:57:24 PM
http://seekingalpha.com/article/358931-dividend-play-methanex-positioned-for-40-annual-gains?source=yahoo
February 10, 2012
Methanex (MEOH) is the world's largest supplier of methanol as a $2.78 billion mid-cap company. Methanol is a substance that is used in a variety of products, including: recyclable plastic bottles, windshield washer fluid, paint, plywood floors, silicone sealants, synthetic fibers, gasoline blending, dimethyl ether, biodiesel, and more. Methanex covers markets in North America, Asia Pacific, Latin America, the Middle East, and Europe.
It is clearly undervalued with a trailing PE ratio of 14.4, a forward PE ratio of 8.74, a PEG ratio of 0.25, and a price to book ratio of only 1.98.
Methanex's profit and income are healthy and growing with momentum. It has a profit margin of 7.72% and an operating margin of 13.19%. Management has achieved a return on assets of 6.65% and a return on equity of 15.08%.
The company has earnings per share of $2.06 and grew earnings at 129.2% in its last quarter. It has a nice operating cash flow of $479.71 million and levered free cash flow of $144.92 million. Its free cash flow allows Methanex to reward shareholders with a 2.3% dividend.
Its balance sheet is also in good shape, with total cash of $350.71 million, and total debt of $1.01 billion. It has 1.72 times more current assets than current liabilities and a debt to equity ratio of 62.89.
Methanex has met or exceeded earnings estimates in 3 out of 4 quarters in 2011. It missed its 2nd quarter estimates by only 1 cent. It is expected to grow earnings annually at an aggressive 38% for the next five years. When you combine its dividend of 2.3% with this earnings growth, investors can expect to achieve about a 40% total annual yield (dividends plus stock growth). If it can meet its earnings expectations over the next five years, I would estimate the stock price to go from $29 to $145 by 2017.
The company currently has some advantages going for it to achieve this growth. It is benefiting from the low cost of natural gas. It refines natural gas into the liquid alcohol, methanol. Methanol's use as a blend in gasoline is growing in demand in China. So, with natural gas at a low cost, Methanex benefits greatly as that is its primary raw material. The EIA has forecast the price of natural gas to remain low at $3.35 per MMBtu in 2012 and $4.07 MMBtu for 2013.
The company is looking to add a second plant in New Zealand, and is considering opening a plant on the U.S. Gulf Coast, which could be ready by the second half of 2014. CEO Bruce Atkins said, "The outlook for the industry also looks very attractive, as demand growth is expected to significantly exceed new capacity additions over the next few years."
Methanex looks like a solid high-growth investment over the next few years. Although it currently looks overbought, its undervaluation and high earnings make it attractive. I would wait for a little sell-off in the stock before jumping in.
Recent MEOH News
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 09/09/2024 06:17:00 PM
- Methanex Corporation Signs Definitive Agreement to Acquire OCI Global’s International Methanol Business for $2.05 Billion • GlobeNewswire Inc. • 09/09/2024 01:00:53 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 08/26/2024 04:01:26 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 08/13/2024 04:06:36 PM
- Methanex Corporation to Temporarily Idle New Zealand Operations to Assist in Improving Energy Balances • GlobeNewswire Inc. • 08/12/2024 09:32:20 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 07/30/2024 09:20:18 PM
- Geismar 3 (“G3”) Produces First Methanol and Methanex Reports Higher Second Quarter 2024 Earnings • GlobeNewswire Inc. • 07/30/2024 09:03:54 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 07/19/2024 04:16:13 PM
- Methanex Corporation – Notice of Cash Dividend • GlobeNewswire Inc. • 07/19/2024 02:39:04 AM
- Methanex and Entropy Partner to Reduce Emissions in Methanol Production • GlobeNewswire Inc. • 07/17/2024 09:00:20 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 06/04/2024 09:18:54 PM
- Methanex Corporation Provides Update on Egypt Operations • GlobeNewswire Inc. • 06/04/2024 09:00:35 PM
- Methanex Reports on Annual General Meeting of Shareholders and Welcomes Roger Perreault to Its Board of Directors • GlobeNewswire Inc. • 04/25/2024 09:00:23 PM
- Methanex Corporation – Notice of Cash Dividend • GlobeNewswire Inc. • 04/24/2024 11:59:37 PM
- Methanex Reports Higher First Quarter 2024 Earnings as Methanol Prices Increase • GlobeNewswire Inc. • 04/24/2024 09:03:33 PM
- Methanex Renews and Adds New Tranche to Revolving Credit Facility • GlobeNewswire Inc. • 04/24/2024 09:00:09 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 03/08/2024 10:24:31 PM
- Methanex Releases 2023 Sustainability Report • GlobeNewswire Inc. • 03/08/2024 08:24:50 PM
- Form 40-F - Registration statement [Section 12] or Annual Report [Section 13(a), 15(d)] • Edgar (US Regulatory) • 03/08/2024 06:31:32 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/21/2024 10:24:46 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/20/2024 06:05:15 PM
- Methanex Provides Update on Geismar 3 Methanol Plant in Geismar, Louisiana • GlobeNewswire Inc. • 02/20/2024 12:46:45 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/13/2024 03:19:55 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 02/08/2024 03:03:08 PM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 02/01/2024 09:14:29 PM
FEATURED Cannabix Technologies and Omega Laboratories Inc. Advance Marijuana Breathalyzer Technology - Dr. Bruce Goldberger to Present at Society of Forensic Toxicologists Conference • Sep 24, 2024 8:50 AM
FEATURED Integrated Ventures, Inc Announces Strategic Partnership For GLP-1 (Semaglutide) Procurement Through MedWell USA, LLC. • Sep 24, 2024 8:45 AM
Avant Technologies Accelerates Creation of AI-Powered Platform to Revolutionize Patient Care • AVAI • Sep 24, 2024 8:00 AM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM