MAINSTREET EQUITY CORP (MEQ.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MEQ - CA5609151009 - Common Stock
179 CAD
-0.09 (-0.05%)
Overall MEQ gets a fundamental rating of 6 out of 10. We evaluated MEQ against 32 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.
- MEQ had positive earnings in each of the past 5 years.
- In the past 5 years MEQ always reported a positive cash flow from operatings.
1.2 Ratios
- MEQ's Return On Assets of 7.03% is amongst the best of the industry. MEQ outperforms 96.88% of its industry peers.
- The Return On Equity of MEQ (15.92%) is better than 96.88% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 3.64%, MEQ is in line with its industry, outperforming 59.38% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for MEQ is significantly below the industry average of 10.66%.
- 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
- The Profit Margin of MEQ (103.88%) is better than 100.00% of its industry peers.
- In the last couple of years the Profit Margin of MEQ has grown nicely.
- MEQ has a better Operating Margin (59.32%) than 96.88% of its industry peers.
- In the last couple of years the Operating Margin of MEQ has grown nicely.
- MEQ's Gross Margin of 66.37% is amongst the best of the industry. MEQ outperforms 81.25% of its industry peers.
- 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.
- MEQ has about the same amout of shares outstanding than it did 1 year ago.
- Compared to 5 years ago, MEQ has about the same amount of shares outstanding.
- MEQ has a better debt/assets ratio than last year.
2.2 Solvency
- Based on the Altman-Z score of 1.26, we must say that MEQ is in the distress zone and has some risk of bankruptcy.
- MEQ has a Altman-Z score (1.26) which is comparable to the rest of the industry.
- The Debt to FCF ratio of MEQ is 22.75, which is on the high side as it means it would take MEQ, 22.75 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of MEQ (22.75) is better than 62.50% of its industry peers.
- 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 comparable to the rest of the industry: MEQ outperforms 40.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 22.75 | ||
| Altman-Z | 1.26 |
ROIC/WACC0.49
WACC7.37%
2.3 Liquidity
- A Current Ratio of 1.13 indicates that MEQ should not have too much problems paying its short term obligations.
- MEQ's Current ratio of 1.13 is in line compared to the rest of the industry. MEQ outperforms 50.00% of its industry peers.
- 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.
- Looking at the Quick ratio, with a value of 1.13, MEQ is in line with its industry, outperforming 50.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
- MEQ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 43.59%, which is quite impressive.
- The Earnings Per Share has been growing by 33.33% on average over the past years. This is a very strong growth
- Looking at the last year, MEQ shows a quite strong growth in Revenue. The Revenue has grown by 10.61% in the last year.
- The Revenue has been growing by 13.02% on average over the past years. This is quite good.
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
- Based on estimates for the next years, MEQ will show a very negative growth in Earnings Per Share. The EPS will decrease by -42.71% on average per year.
- The Revenue is expected to grow by 4.84% on average over the next years.
EPS Next Y-69.26%
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
- The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
- 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
- Based on the Price/Earnings ratio of 5.81, the valuation of MEQ can be described as very cheap.
- MEQ's Price/Earnings ratio is rather cheap when compared to the industry. MEQ is cheaper than 90.63% of the companies in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 27.25, MEQ is valued rather cheaply.
- With a Price/Forward Earnings ratio of 18.90, MEQ is valued on the expensive side.
- 84.38% of the companies in the same industry are more expensive than MEQ, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of MEQ to the average of the S&P500 Index (25.98), we can say MEQ is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.81 | ||
| Fwd PE | 18.9 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MEQ indicates a somewhat cheap valuation: MEQ is cheaper than 71.88% of the companies listed in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of MEQ indicates a somewhat cheap valuation: MEQ is cheaper than 65.63% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.76 | ||
| EV/EBITDA | 19.86 |
4.3 Compensation for Growth
- MEQ has an outstanding profitability rating, which may justify a higher PE ratio.
- A cheap valuation may be justified as MEQ's earnings are expected to decrease with -42.71% in the coming years.
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.
- MEQ's Dividend Yield is slightly below the industry average, which is at 2.31.
- With a Dividend Yield of 0.18, MEQ pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.18% |
5.2 History
- MEQ has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- MEQ pays out 0.48% of its income as dividend. This is a 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%.