Methanex Corp.2

On my other blog I am today writing about my blogging plans for 2016 learn more...

Sound bite for Twitter and StockTwits is: Price probably reasonable. This company produces a commodity (methanol). It is tough times for any commodity. Because of this would not be a short term play. It can only be a long term investment at this time. See my spreadsheet on Methanex Corp.

I do not own this stock of Methanex Corp. (TSX-MX, NASDAQ-MEOH). I started a spreadsheet in November 2010 as I had read some good reports on the stock at that time. It is also got a solid "C" grade in a 2009 Money Sense review of stocks. Money Sense rated the top 100 Canadian Dividend Paying stocks. Money Sense was looking for stocks that provided generous income at reasonable prices.

I get 5 year low, median and high median Price/Earnings per Share Ratios of 9.55, 12.81 and 15.35. These are a bit higher than the 10 year corresponding P/E Ratios of 9.12, 12.38 and 15.06. The historical median P/E is 10.40. The current P/E Ratio is 15.55 based on a stock price of $48.65 and 2015 estimate EPS of $2.26 US$ or $3.13 CDN$. This stock price test suggests that the stock price is relatively expensive.

Since it is close to the end of 2015, we should also look at P/E Ratio for 2016. This P/E Ratio is 14.11 based on a stock price of $48.65 and 2016 estimate EPS of $2.49 US$ or $3.45 CDN$. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

I get a Graham Price of $42.82. The 10 year low, median and high median Price/Graham Price Ratios are 0.84, 1.11 and 1.32. The current P/GP Ratio is 1.14 based on a stock price of $48.65. This stock price testing suggests that the stock price is relatively reasonable, but above the median.

The 10 year median Price/Book Value per Share Ratio is 2.02. The current P/B Ratio is 1.87 based on a stock price of $48.65 and BVPS of $26.05. The current P/B Ratio is some 7.7% lower than the 10 year P/B Ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

This historical median dividend yield is 2.15%. The current dividend is 3.13% based on dividends of $1.52 CDN$ ($1.10 US$) and a stock price of $48.65. The current dividend yield is some 45% higher than the historical median dividend yield. This is not close to the historical high yields 7% plus it reached in 2009, but it is relatively high and suggests that the stock price is relatively reasonable, if not relatively cheap.

When I look analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price consensus is $51.90 US$ ($71.86 CDN$). This implies a total return of 50.83% with 47.70% from capital gains and 3.13% from dividends. (This implied total return is the same if done wholly in US$ or in CDN$.)

This report on News Watching International talks about the company getting a rank of 3 (Hold) from Zacks and rating from other analysts. (Note values are given in US$.) This report on Investor Wired talks about Methanex Corp's high EPS growth over the past 5 years. I discussed yesterday why this growth in EPS is not as good as it seems. There are some analysts remarks on this company at Stock Chase.

This is the second of two parts. The first part was posted on Tuesday, December 29, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Methanex is the world's largest supplier of methanol to major international markets in North America, Asia Pacific, Europe and Latin America. Methanol is an important ingredient in many of the essential industrial and consumer products. Head Office is in Vancouver, B. C. Canada. Its web site is here Methanex Corp.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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