MERCER INTERNATIONAL INC (MERC) Stock Fundamental Analysis
NASDAQ:MERC - Nasdaq - US5880561015 - Common Stock - Currency: USD
Taking everything into account, MERC scores 4 out of 10 in our fundamental rating. MERC was compared to 9 industry peers in the Paper & Forest Products industry. MERC scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. While showing a medium growth rate, MERC is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
MERC had negative earnings in the past year.
MERC had a positive operating cash flow in the past year.
In multiple years MERC reported negative net income over the last 5 years.
Of the past 5 years MERC 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of MERC (-3.76%) is comparable to the rest of the industry.
MERC has a worse Return On Equity (-19.81%) than 66.67% of its industry peers.
MERC has a Return On Invested Capital of 4.16%. This is in the better half of the industry: MERC outperforms 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.76% | ||
| ROE | -19.81% | ||
| ROIC | 4.16% |
ROA(3y)-1.26%
ROA(5y)0.54%
ROE(3y)-9.49%
ROE(5y)-1.34%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
MERC's Operating Margin of 5.17% is fine compared to the rest of the industry. MERC outperforms 66.67% of its industry peers.
In the last couple of years the Operating Margin of MERC has declined.
With a Gross Margin value of 9.71%, MERC perfoms like the industry average, outperforming 44.44% of the companies in the same industry.
MERC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.17% | ||
| PM (TTM) | N/A | ||
| GM | 9.71% |
OM growth 3Y-40.69%
OM growth 5Y-5.03%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-25.62%
GM growth 5Y-0.06%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so MERC is destroying value.
MERC has more shares outstanding than it did 1 year ago.
The number of shares outstanding for MERC has been increased compared to 5 years ago.
Compared to 1 year ago, MERC has a worse debt to assets ratio.
2.2 Solvency
MERC has an Altman-Z score of 1.65. This is a bad value and indicates that MERC is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.65, MERC is in line with its industry, outperforming 55.56% of the companies in the same industry.
The Debt to FCF ratio of MERC is 252.02, which is on the high side as it means it would take MERC, 252.02 years of fcf income to pay off all of its debts.
MERC has a Debt to FCF ratio (252.02) which is comparable to the rest of the industry.
MERC has a Debt/Equity ratio of 3.43. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 3.43, MERC is doing worse than 88.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.43 | ||
| Debt/FCF | 252.02 | ||
| Altman-Z | 1.65 |
ROIC/WACC0.6
WACC6.95%
2.3 Liquidity
MERC has a Current Ratio of 3.55. This indicates that MERC is financially healthy and has no problem in meeting its short term obligations.
MERC has a better Current ratio (3.55) than 100.00% of its industry peers.
MERC has a Quick Ratio of 2.14. This indicates that MERC is financially healthy and has no problem in meeting its short term obligations.
MERC has a Quick ratio of 2.14. This is amongst the best in the industry. MERC outperforms 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.55 | ||
| Quick Ratio | 2.14 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 87.22% over the past year.
MERC shows a small growth in Revenue. In the last year, the Revenue has grown by 2.48%.
MERC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.70% yearly.
EPS 1Y (TTM)87.22%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%131.25%
Revenue 1Y (TTM)2.48%
Revenue growth 3Y4.25%
Revenue growth 5Y4.7%
Sales Q2Q%3.81%
3.2 Future
The Earnings Per Share is expected to grow by 29.83% on average over the next years. This is a very strong growth
MERC is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.02% yearly.
EPS Next Y94.9%
EPS Next 2Y71.19%
EPS Next 3Y85.16%
EPS Next 5Y29.83%
Revenue Next Year0.76%
Revenue Next 2Y3.24%
Revenue Next 3Y10.02%
Revenue Next 5YN/A
3.3 Evolution
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings Ratio is negative for MERC. In the last year negative earnings were reported.
Besides the negative Price/Earnings Ratio, also the Forward Price/Earnings Ratio is negative for MERC. No positive earnings are expected for the next year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | N/A |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MERC is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
MERC's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 54.08 | ||
| EV/EBITDA | 5.9 |
4.3 Compensation for Growth
A more expensive valuation may be justified as MERC's earnings are expected to grow with 85.16% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y71.19%
EPS Next 3Y85.16%
5. Dividend
5.1 Amount
MERC has a Yearly Dividend Yield of 6.05%, which is a nice return.
In the last 3 months the price of MERC has falen by -28.85%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 2.69, MERC pays a better dividend. On top of this MERC pays more dividend than 100.00% of the companies listed in the same industry.
MERC's Dividend Yield is rather good when compared to the S&P500 average which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.05% |
5.2 History
The dividend of MERC decreases each year by -11.04%.
MERC has paid a dividend for at least 10 years, which is a reliable track record.
MERC has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)-11.04%
Div Incr Years1
Div Non Decr Years3
5.3 Sustainability
The earnings of MERC are negative and hence is the payout ratio. MERC will probably not be able to sustain this dividend level.
DP-23.56%
EPS Next 2Y71.19%
EPS Next 3Y85.16%
4.76
-0.2 (-4.03%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryPaper & Forest Products
Earnings (Last)
Earnings (Next)
Inst Owners50.5%
Inst Owner Change-0.19%
Ins Owners1.15%
Ins Owner Change-0.66%
Market Cap318.30M
Analysts48.89
Price Target7.52 (57.98%)
Short Float %1.35%
Short Ratio1.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.05% |
Yearly Dividend0.3
Dividend Growth(5Y)-11.04%
DP-23.56%
Div Incr Years1
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)53.43%
Min EPS beat(2)-405.89%
Max EPS beat(2)512.75%
EPS beat(4)2
Avg EPS beat(4)69.52%
Min EPS beat(4)-405.89%
Max EPS beat(4)512.75%
EPS beat(8)3
Avg EPS beat(8)-25.64%
EPS beat(12)6
Avg EPS beat(12)-16.82%
EPS beat(16)9
Avg EPS beat(16)-10.03%
Revenue beat(2)1
Avg Revenue beat(2)-0.76%
Min Revenue beat(2)-3.75%
Max Revenue beat(2)2.23%
Revenue beat(4)3
Avg Revenue beat(4)1.69%
Min Revenue beat(4)-3.75%
Max Revenue beat(4)6.81%
Revenue beat(8)5
Avg Revenue beat(8)1.62%
Revenue beat(12)9
Avg Revenue beat(12)3.38%
Revenue beat(16)10
Avg Revenue beat(16)1.79%
PT rev (1m)0%
PT rev (3m)3.51%
EPS NQ rev (1m)0%
EPS NQ rev (3m)62.5%
EPS NY rev (1m)90.16%
EPS NY rev (3m)89.47%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.18%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | N/A | ||
| Fwd PE | N/A | ||
| P/S | 0.16 | ||
| P/FCF | 54.08 | ||
| P/OCF | 3.53 | ||
| P/B | 0.74 | ||
| P/tB | 0.84 | ||
| EV/EBITDA | 5.9 |
EPS(TTM)-0.4
EYN/A
EPS(NY)-0.02
Fwd EYN/A
FCF(TTM)0.09
FCFY1.85%
OCF(TTM)1.35
OCFY28.34%
SpS30.56
BVpS6.43
TBVpS5.68
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.76% | ||
| ROE | -19.81% | ||
| ROCE | 5.26% | ||
| ROIC | 4.16% | ||
| ROICexc | 4.58% | ||
| ROICexgc | 4.71% | ||
| OM | 5.17% | ||
| PM (TTM) | N/A | ||
| GM | 9.71% | ||
| FCFM | 0.29% |
ROA(3y)-1.26%
ROA(5y)0.54%
ROE(3y)-9.49%
ROE(5y)-1.34%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-39.32%
ROICexcg growth 5Y-5.08%
ROICexc growth 3Y-39.31%
ROICexc growth 5Y-4.89%
OM growth 3Y-40.69%
OM growth 5Y-5.03%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-25.62%
GM growth 5Y-0.06%
F-Score5
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.43 | ||
| Debt/FCF | 252.02 | ||
| Debt/EBITDA | 5.33 | ||
| Cap/Depr | 49.37% | ||
| Cap/Sales | 4.13% | ||
| Interest Coverage | 1 | ||
| Cash Conversion | 32.64% | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.55 | ||
| Quick Ratio | 2.14 | ||
| Altman-Z | 1.65 |
F-Score5
WACC6.95%
ROIC/WACC0.6
Cap/Depr(3y)84.22%
Cap/Depr(5y)87.15%
Cap/Sales(3y)6.27%
Cap/Sales(5y)6.66%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)87.22%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%131.25%
EPS Next Y94.9%
EPS Next 2Y71.19%
EPS Next 3Y85.16%
EPS Next 5Y29.83%
Revenue 1Y (TTM)2.48%
Revenue growth 3Y4.25%
Revenue growth 5Y4.7%
Sales Q2Q%3.81%
Revenue Next Year0.76%
Revenue Next 2Y3.24%
Revenue Next 3Y10.02%
Revenue Next 5YN/A
EBIT growth 1Y209.56%
EBIT growth 3Y-38.17%
EBIT growth 5Y-0.57%
EBIT Next Year1987.88%
EBIT Next 3Y215.65%
EBIT Next 5Y117.71%
FCF growth 1Y102.87%
FCF growth 3Y-34.97%
FCF growth 5Y-44.48%
OCF growth 1Y230.72%
OCF growth 3Y-20.89%
OCF growth 5Y-18.07%