LUNDIN MINING CORP (LUN.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:LUN - CA5503721063 - Common Stock
32.67 CAD
-4 (-10.91%)
Taking everything into account, LUN scores 6 out of 10 in our fundamental rating. LUN was compared to 817 industry peers in the Metals & Mining industry. LUN has an excellent profitability rating, but there are some minor concerns on its financial health. LUN may be a bit undervalued, certainly considering the very reasonable score on growth These ratings could make LUN a good candidate for value investing.
1. Profitability
1.1 Basic Checks
- LUN had positive earnings in the past year.
- In the past year LUN had a positive cash flow from operations.
- Of the past 5 years LUN 4 years were profitable.
- LUN had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- LUN's Return On Assets of 0.14% is amongst the best of the industry. LUN outperforms 84.58% of its industry peers.
- The Return On Equity of LUN (0.24%) is better than 85.19% of its industry peers.
- LUN's Return On Invested Capital of 4.91% is amongst the best of the industry. LUN outperforms 91.06% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for LUN is significantly below the industry average of 11.97%.
- The 3 year average ROIC (3.70%) for LUN is below the current ROIC(4.91%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.14% | ||
| ROE | 0.24% | ||
| ROIC | 4.91% |
ROA(3y)1.83%
ROA(5y)3.62%
ROE(3y)3.02%
ROE(5y)6.17%
ROIC(3y)3.7%
ROIC(5y)4.6%
1.3 Margins
- Looking at the Profit Margin, with a value of 0.42%, LUN belongs to the top of the industry, outperforming 89.23% of the companies in the same industry.
- With an excellent Operating Margin value of 27.31%, LUN belongs to the best of the industry, outperforming 94.00% of the companies in the same industry.
- In the last couple of years the Operating Margin of LUN has grown nicely.
- Looking at the Gross Margin, with a value of 31.23%, LUN belongs to the top of the industry, outperforming 91.06% of the companies in the same industry.
- LUN's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.31% | ||
| PM (TTM) | 0.42% | ||
| GM | 31.23% |
OM growth 3Y-14.85%
OM growth 5Y8.15%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-13.35%
GM growth 5Y2.84%
2. Health
2.1 Basic Checks
- LUN has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for LUN remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, LUN has more shares outstanding
- Compared to 1 year ago, LUN has a worse debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 3.70 indicates that LUN is not in any danger for bankruptcy at the moment.
- The Altman-Z score of LUN (3.70) is comparable to the rest of the industry.
- LUN has a debt to FCF ratio of 0.99. This is a very positive value and a sign of high solvency as it would only need 0.99 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 0.99, LUN belongs to the top of the industry, outperforming 93.88% of the companies in the same industry.
- LUN has a Debt/Equity ratio of 0.07. This is a healthy value indicating a solid balance between debt and equity.
- LUN has a Debt to Equity ratio of 0.07. This is in the lower half of the industry: LUN underperforms 61.81% of its industry peers.
- Although LUN does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.07 | ||
| Debt/FCF | 0.99 | ||
| Altman-Z | 3.7 |
ROIC/WACC0.52
WACC9.4%
2.3 Liquidity
- LUN has a Current Ratio of 1.45. This is a normal value and indicates that LUN is financially healthy and should not expect problems in meeting its short term obligations.
- LUN has a Current ratio (1.45) which is in line with its industry peers.
- LUN has a Quick Ratio of 1.45. This is a bad value and indicates that LUN is not financially healthy enough and could expect problems in meeting its short term obligations.
- LUN has a Quick ratio (0.90) which is comparable to the rest of the industry.
- LUN does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.45 | ||
| Quick Ratio | 0.9 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 52.71% over the past year.
- The Earnings Per Share has been growing by 11.05% on average over the past years. This is quite good.
- The Revenue for LUN has decreased by -22.06% in the past year. This is quite bad
- Measured over the past years, LUN shows a quite strong growth in Revenue. The Revenue has been growing by 12.58% on average per year.
EPS 1Y (TTM)52.71%
EPS 3Y-25.88%
EPS 5Y11.05%
EPS Q2Q%100%
Revenue 1Y (TTM)-22.06%
Revenue growth 3Y0.93%
Revenue growth 5Y12.58%
Sales Q2Q%-6.15%
3.2 Future
- Based on estimates for the next years, LUN will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.92% on average per year.
- LUN is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 0.66% yearly.
EPS Next Y50.89%
EPS Next 2Y40.62%
EPS Next 3Y21.71%
EPS Next 5Y14.92%
Revenue Next Year-4.66%
Revenue Next 2Y0.31%
Revenue Next 3Y-1.17%
Revenue Next 5Y0.66%
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- LUN is valuated quite expensively with a Price/Earnings ratio of 37.99.
- Compared to the rest of the industry, the Price/Earnings ratio of LUN indicates a rather cheap valuation: LUN is cheaper than 89.35% of the companies listed in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.21. LUN is valued slightly more expensive when compared to this.
- With a Price/Forward Earnings ratio of 26.23, LUN can be considered very expensive at the moment.
- LUN's Price/Forward Earnings ratio is rather cheap when compared to the industry. LUN is cheaper than 89.11% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of LUN to the average of the S&P500 Index (24.26), we can say LUN is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.99 | ||
| Fwd PE | 26.23 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LUN indicates a rather cheap valuation: LUN is cheaper than 93.15% of the companies listed in the same industry.
- LUN's Price/Free Cash Flow ratio is rather cheap when compared to the industry. LUN is cheaper than 94.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.62 | ||
| EV/EBITDA | 14.66 |
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.
- The excellent profitability rating of LUN may justify a higher PE ratio.
- LUN's earnings are expected to grow with 21.71% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.75
PEG (5Y)3.44
EPS Next 2Y40.62%
EPS Next 3Y21.71%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.32%, LUN is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.64, LUN pays a better dividend. On top of this LUN pays more dividend than 95.23% of the companies listed in the same industry.
- With a Dividend Yield of 0.32, LUN pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.32% |
5.2 History
- The dividend of LUN is nicely growing with an annual growth rate of 23.66%!
- LUN has been paying a dividend for over 5 years, so it has already some track record.
- The dividend of LUN decreased recently.
Dividend Growth(5Y)23.66%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- 1243.04% of the earnings are spent on dividend by LUN. This is not a sustainable payout ratio.
- LUN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP1243.04%
EPS Next 2Y40.62%
EPS Next 3Y21.71%
LUNDIN MINING CORP / LUN.CA FAQ
What is the fundamental rating for LUN stock?
ChartMill assigns a fundamental rating of 6 / 10 to LUN.CA.
Can you provide the valuation status for LUNDIN MINING CORP?
ChartMill assigns a valuation rating of 7 / 10 to LUNDIN MINING CORP (LUN.CA). This can be considered as Undervalued.
Can you provide the profitability details for LUNDIN MINING CORP?
LUNDIN MINING CORP (LUN.CA) has a profitability rating of 8 / 10.
Can you provide the PE and PB ratios for LUN stock?
The Price/Earnings (PE) ratio for LUNDIN MINING CORP (LUN.CA) is 37.99 and the Price/Book (PB) ratio is 3.52.
Can you provide the expected EPS growth for LUN stock?
The Earnings per Share (EPS) of LUNDIN MINING CORP (LUN.CA) is expected to grow by 50.89% in the next year.