NEW YORK (
-- Methanex Corporation
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Chemicals industry and the overall market, METHANEX CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- MEOH's debt-to-equity ratio of 0.74 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that MEOH's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.64 is high and demonstrates strong liquidity.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 36.40% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- METHANEX CORP has improved earnings per share by 7.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, METHANEX CORP increased its bottom line by earning $1.09 versus $0.01 in the prior year.
- The revenue growth came in higher than the industry average of 19.6%. Since the same quarter one year prior, revenues rose by 49.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
Methanex Corporation produces, markets, and supplies methanol that is used to make a range of industrial, consumer, and energy products. It also sources methanol produced by others. The company has a P/E ratio of 29.8, equal to the average chemicals industry P/E ratio and above the S&P 500 P/E ratio of 16.4. Methanex has a market cap of $3 billion and is part of the
industry. Shares are up 6.8% year to date as of the close of trading on Wednesday.
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