MAINSTREET EQUITY CORP (MEQ.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:MEQ - CA5609151009 - Common Stock
179.09 CAD
+3 (+1.7%)
We assign a fundamental rating of 6 out of 10 to MEQ. MEQ was compared to 32 industry peers in the Real Estate Management & Development industry. While MEQ belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MEQ is not valued too expensively and it also shows a decent 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
- The Return On Assets of MEQ (7.03%) is better than 96.88% of its industry peers.
- MEQ has a better Return On Equity (15.92%) than 96.88% of its industry peers.
- MEQ has a Return On Invested Capital (3.64%) which is in line with 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 10.66%.
- The 3 year average ROIC (3.47%) for MEQ is below the current ROIC(3.64%), indicating increased profibility in the last year.
| 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.
- MEQ's Profit Margin has improved in the last couple of years.
- The Operating Margin of MEQ (59.32%) is better than 96.88% of its industry peers.
- In the last couple of years the Operating Margin of MEQ has grown nicely.
- MEQ has a better Gross Margin (66.37%) than 81.25% of its industry peers.
- MEQ's Gross Margin has been stable in the last couple of years.
| 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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.
- The Altman-Z score of MEQ (1.26) 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.
- MEQ has a better Debt to FCF ratio (22.75) than 62.50% of its industry peers.
- MEQ has a Debt/Equity ratio of 0.91. This is a neutral value indicating 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 has a Current ratio (1.13) which is comparable to the rest of the 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 50.00% of its industry peers.
| 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.
- MEQ shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 33.33% yearly.
- 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
- The Earnings Per Share is expected to decrease by -42.71% on average over the next years. This is quite bad
- 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
- 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.
- 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
- With a Price/Earnings ratio of 5.81, the valuation of MEQ can be described as very cheap.
- Based on the Price/Earnings ratio, MEQ is valued cheaply inside the industry as 93.75% of the companies are valued more expensively.
- 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 18.91.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of MEQ indicates a rather cheap valuation: MEQ is cheaper than 84.38% of the companies listed in the same industry.
- MEQ's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.81 | ||
| Fwd PE | 18.91 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, MEQ is valued a bit cheaper than 71.88% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, MEQ is valued a bit cheaper than 65.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.77 | ||
| EV/EBITDA | 19.86 |
4.3 Compensation for Growth
- The excellent profitability rating of MEQ 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.
- Compared to an average industry Dividend Yield of 2.31, MEQ is paying slightly less dividend.
- With a Dividend Yield of 0.18, MEQ pays less dividend than the S&P500 average, which is at 1.81.
| 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
- 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%.