MAINSTREET EQUITY CORP (MEQ.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MEQ - CA5609151009 - Common Stock
176.09 CAD
+2.18 (+1.25%)
Overall MEQ gets a fundamental rating of 6 out of 10. We evaluated MEQ against 33 industry peers in the Real Estate Management & Development industry. MEQ scores excellent on profitability, but there are some minor concerns on its financial health. MEQ has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year MEQ was profitable.
- In the past year MEQ had a positive cash flow from operations.
- Each year in the past 5 years MEQ has been profitable.
- In the past 5 years MEQ always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 7.03%, MEQ belongs to the top of the industry, outperforming 96.97% of the companies in the same industry.
- MEQ has a Return On Equity of 15.92%. This is amongst the best in the industry. MEQ outperforms 96.97% of its industry peers.
- MEQ has a better Return On Invested Capital (3.64%) than 60.61% of its industry peers.
- MEQ had an Average Return On Invested Capital over the past 3 years of 3.47%. This is significantly below the industry average of 10.36%.
- The last Return On Invested Capital (3.64%) for MEQ is above the 3 year average (3.47%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.03% | ||
| ROE | 15.92% | ||
| ROIC | 3.64% |
ROA(3y)5.4%
ROA(5y)5.76%
ROE(3y)12.46%
ROE(5y)13.6%
ROIC(3y)3.47%
ROIC(5y)3.2%
1.3 Margins
- With an excellent Profit Margin value of 103.88%, MEQ belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of MEQ has grown nicely.
- Looking at the Operating Margin, with a value of 59.32%, MEQ belongs to the top of the industry, outperforming 96.97% of the companies in the same industry.
- MEQ's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 66.37%, MEQ is in the better half of the industry, outperforming 78.79% of the companies in the same industry.
- In the last couple of years the Gross Margin of MEQ has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 59.32% | ||
| PM (TTM) | 103.88% | ||
| GM | 66.37% |
OM growth 3Y4.53%
OM growth 5Y2.2%
PM growth 3Y15.9%
PM growth 5Y17.8%
GM growth 3Y3%
GM growth 5Y1.35%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), MEQ is destroying value.
- The number of shares outstanding for MEQ remains at a similar level compared to 1 year ago.
- MEQ has about the same amout of shares outstanding than it did 5 years ago.
- The debt/assets ratio for MEQ has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 1.25, we must say that MEQ is in the distress zone and has some risk of bankruptcy.
- MEQ has a Altman-Z score (1.25) which is in line with its industry peers.
- MEQ has a debt to FCF ratio of 22.75. This is a negative value and a sign of low solvency as MEQ would need 22.75 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 22.75, MEQ is in the better half of the industry, outperforming 60.61% of the companies in the same industry.
- A Debt/Equity ratio of 0.91 indicates that MEQ is somewhat dependend on debt financing.
- MEQ has a Debt to Equity ratio of 0.91. This is in the lower half of the industry: MEQ underperforms 63.64% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 22.75 | ||
| Altman-Z | 1.25 |
ROIC/WACC0.5
WACC7.29%
2.3 Liquidity
- A Current Ratio of 1.13 indicates that MEQ should not have too much problems paying its short term obligations.
- With a Current ratio value of 1.13, MEQ perfoms like the industry average, outperforming 48.48% of the companies in the same industry.
- MEQ has a Quick Ratio of 1.13. This is a normal value and indicates that MEQ is financially healthy and should not expect problems in meeting its short term obligations.
- MEQ's Quick ratio of 1.13 is in line compared to the rest of the industry. MEQ outperforms 48.48% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 43.59% over the past year.
- Measured over the past years, MEQ shows a very strong growth in Earnings Per Share. The EPS has been growing by 33.33% on average per year.
- The Revenue has grown by 10.61% in the past year. This is quite good.
- MEQ shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.02% yearly.
EPS 1Y (TTM)43.59%
EPS 3Y33.62%
EPS 5Y33.33%
EPS Q2Q%-18.31%
Revenue 1Y (TTM)10.61%
Revenue growth 3Y15.23%
Revenue growth 5Y13.02%
Sales Q2Q%5.34%
3.2 Future
- MEQ is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -42.71% yearly.
- MEQ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.84% yearly.
EPS Next Y-68.86%
EPS Next 2Y-42.71%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year7.12%
Revenue Next 2Y4.84%
Revenue Next 3YN/A
Revenue Next 5YN/A
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 decreasing.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 5.72, which indicates a rather cheap valuation of MEQ.
- MEQ's Price/Earnings ratio is rather cheap when compared to the industry. MEQ is cheaper than 93.94% of the companies in the same industry.
- MEQ is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- MEQ is valuated rather expensively with a Price/Forward Earnings ratio of 18.36.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of MEQ indicates a rather cheap valuation: MEQ is cheaper than 84.85% of the companies listed in the same industry.
- When comparing the Price/Forward Earnings ratio of MEQ to the average of the S&P500 Index (24.26), we can say MEQ is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.72 | ||
| Fwd PE | 18.36 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MEQ is valued a bit cheaper than the industry average as 72.73% of the companies are valued more expensively.
- Based on the Price/Free Cash Flow ratio, MEQ is valued a bit cheaper than 63.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.44 | ||
| EV/EBITDA | 19.69 |
4.3 Compensation for Growth
- MEQ has an outstanding profitability rating, which may justify a higher PE ratio.
- MEQ's earnings are expected to decrease with -42.71% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)0.17
EPS Next 2Y-42.71%
EPS Next 3YN/A
5. Dividend
5.1 Amount
- MEQ has a yearly dividend return of 0.18%, which is pretty low.
- Compared to an average industry Dividend Yield of 2.32, MEQ is paying slightly less dividend.
- Compared to an average S&P500 Dividend Yield of 1.82, MEQ's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.18% |
5.2 History
- MEQ has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 0.48% of the earnings are spent on dividend by MEQ. This is a low number and sustainable payout ratio.
DP0.48%
EPS Next 2Y-42.71%
EPS Next 3YN/A
MAINSTREET EQUITY CORP / MEQ.CA FAQ
What is the ChartMill fundamental rating of MAINSTREET EQUITY CORP (MEQ.CA) stock?
ChartMill assigns a fundamental rating of 6 / 10 to MEQ.CA.
Can you provide the valuation status for MAINSTREET EQUITY CORP?
ChartMill assigns a valuation rating of 6 / 10 to MAINSTREET EQUITY CORP (MEQ.CA). This can be considered as Fairly Valued.
Can you provide the profitability details for MAINSTREET EQUITY CORP?
MAINSTREET EQUITY CORP (MEQ.CA) has a profitability rating of 8 / 10.
Can you provide the financial health for MEQ stock?
The financial health rating of MAINSTREET EQUITY CORP (MEQ.CA) is 4 / 10.
How sustainable is the dividend of MAINSTREET EQUITY CORP (MEQ.CA) stock?
The dividend rating of MAINSTREET EQUITY CORP (MEQ.CA) is 2 / 10 and the dividend payout ratio is 0.48%.