Intrinsic value of Methanex - MEOH

Previous Close

$43.30

  Intrinsic Value

$1,299

stock screener

  Rating & Target

str. buy

+999%

  Value-price divergence*

+141%

Previous close

$43.30

 
Intrinsic value

$1,299

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence*

+141%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of MEOH stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -10.24
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,998
  3,197
  4,939
  7,386
  10,717
  15,120
  20,787
  27,902
  36,638
  47,144
  59,546
  73,943
  90,403
  108,966
  129,647
  152,442
  177,327
  204,266
  233,215
  264,129
  296,959
  331,664
  368,207
  406,560
  446,706
  488,639
  532,365
  577,901
  625,279
  674,541
  725,742
Variable operating expenses, $m
 
  572
  884
  1,322
  1,918
  2,707
  3,721
  4,995
  6,558
  8,439
  10,659
  13,236
  16,182
  19,505
  23,207
  27,287
  31,742
  36,564
  41,746
  47,279
  53,156
  59,368
  65,909
  72,774
  79,960
  87,466
  95,293
  103,444
  111,925
  120,743
  129,908
Fixed operating expenses, $m
 
  1,671
  1,713
  1,755
  1,799
  1,844
  1,890
  1,938
  1,986
  2,036
  2,087
  2,139
  2,192
  2,247
  2,303
  2,361
  2,420
  2,480
  2,542
  2,606
  2,671
  2,738
  2,806
  2,876
  2,948
  3,022
  3,097
  3,175
  3,254
  3,336
  3,419
Total operating expenses, $m
  1,970
  2,243
  2,597
  3,077
  3,717
  4,551
  5,611
  6,933
  8,544
  10,475
  12,746
  15,375
  18,374
  21,752
  25,510
  29,648
  34,162
  39,044
  44,288
  49,885
  55,827
  62,106
  68,715
  75,650
  82,908
  90,488
  98,390
  106,619
  115,179
  124,079
  133,327
Operating income, $m
  28
  954
  2,342
  4,309
  7,000
  10,570
  15,176
  20,970
  28,094
  36,669
  46,801
  58,569
  72,028
  87,214
  104,137
  122,794
  143,166
  165,222
  188,928
  214,244
  241,132
  269,558
  299,491
  330,909
  363,797
  398,151
  433,974
  471,282
  510,100
  550,462
  592,415
EBITDA, $m
  256
  1,318
  2,905
  5,150
  8,220
  12,291
  17,542
  24,147
  32,264
  42,036
  53,580
  66,986
  82,320
  99,618
  118,897
  140,149
  163,353
  188,476
  215,477
  244,312
  274,938
  307,315
  341,408
  377,192
  414,651
  453,778
  494,579
  537,070
  581,282
  627,252
  675,034
Interest expense (income), $m
  83
  81
  175
  312
  505
  767
  1,113
  1,558
  2,117
  2,804
  3,630
  4,604
  5,736
  7,030
  8,489
  10,114
  11,906
  13,862
  15,979
  18,255
  20,684
  23,265
  25,993
  28,865
  31,879
  35,035
  38,331
  41,767
  45,346
  49,070
  52,942
Earnings before tax, $m
  -38
  873
  2,167
  3,996
  6,495
  9,803
  14,063
  19,412
  25,976
  33,866
  43,171
  53,964
  66,292
  80,184
  95,649
  112,680
  131,260
  151,360
  172,948
  195,989
  220,448
  246,293
  273,499
  302,045
  331,918
  363,116
  395,643
  429,514
  464,753
  501,392
  539,473
Tax expense, $m
  -10
  236
  585
  1,079
  1,754
  2,647
  3,797
  5,241
  7,014
  9,144
  11,656
  14,570
  17,899
  21,650
  25,825
  30,424
  35,440
  40,867
  46,696
  52,917
  59,521
  66,499
  73,845
  81,552
  89,618
  98,041
  106,824
  115,969
  125,483
  135,376
  145,658
Net income, $m
  -13
  637
  1,582
  2,917
  4,741
  7,156
  10,266
  14,171
  18,963
  24,722
  31,515
  39,394
  48,393
  58,534
  69,824
  82,257
  95,820
  110,493
  126,252
  143,072
  160,927
  179,794
  199,654
  220,493
  242,300
  265,075
  288,820
  313,546
  339,270
  366,016
  393,815

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  224
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,557
  6,934
  10,714
  16,022
  23,248
  32,799
  45,091
  60,526
  79,474
  102,264
  129,168
  160,397
  196,101
  236,368
  281,231
  330,678
  384,658
  443,093
  505,890
  572,947
  644,163
  719,444
  798,713
  881,909
  968,994
  1,059,955
  1,154,804
  1,253,581
  1,356,353
  1,463,212
  1,574,278
Adjusted assets (=assets-cash), $m
  4,333
  6,934
  10,714
  16,022
  23,248
  32,799
  45,091
  60,526
  79,474
  102,264
  129,168
  160,397
  196,101
  236,368
  281,231
  330,678
  384,658
  443,093
  505,890
  572,947
  644,163
  719,444
  798,713
  881,909
  968,994
  1,059,955
  1,154,804
  1,253,581
  1,356,353
  1,463,212
  1,574,278
Revenue / Adjusted assets
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
  0.461
Average production assets, $m
  3,139
  5,022
  7,759
  11,604
  16,837
  23,754
  32,657
  43,835
  57,558
  74,063
  93,547
  116,165
  142,022
  171,185
  203,676
  239,487
  278,581
  320,902
  366,381
  414,946
  466,523
  521,044
  578,453
  638,706
  701,775
  767,652
  836,345
  907,882
  982,313
  1,059,703
  1,140,141
Working capital, $m
  419
  400
  617
  923
  1,340
  1,890
  2,598
  3,488
  4,580
  5,893
  7,443
  9,243
  11,300
  13,621
  16,206
  19,055
  22,166
  25,533
  29,152
  33,016
  37,120
  41,458
  46,026
  50,820
  55,838
  61,080
  66,546
  72,238
  78,160
  84,318
  90,718
Total debt, $m
  1,556
  3,249
  5,785
  9,347
  14,195
  20,604
  28,852
  39,209
  51,923
  67,215
  85,268
  106,223
  130,180
  157,199
  187,302
  220,481
  256,701
  295,912
  338,048
  383,044
  430,829
  481,343
  534,532
  590,357
  648,791
  709,826
  773,470
  839,749
  908,709
  980,411
  1,054,937
Total liabilities, $m
  2,960
  4,653
  7,189
  10,751
  15,599
  22,008
  30,256
  40,613
  53,327
  68,619
  86,672
  107,627
  131,584
  158,603
  188,706
  221,885
  258,105
  297,316
  339,452
  384,448
  432,233
  482,747
  535,936
  591,761
  650,195
  711,230
  774,874
  841,153
  910,113
  981,815
  1,056,341
Total equity, $m
  1,597
  2,281
  3,525
  5,271
  7,649
  10,791
  14,835
  19,913
  26,147
  33,645
  42,496
  52,771
  64,517
  77,765
  92,525
  108,793
  126,552
  145,778
  166,438
  188,500
  211,930
  236,697
  262,777
  290,148
  318,799
  348,725
  379,931
  412,428
  446,240
  481,397
  517,937
Total liabilities and equity, $m
  4,557
  6,934
  10,714
  16,022
  23,248
  32,799
  45,091
  60,526
  79,474
  102,264
  129,168
  160,398
  196,101
  236,368
  281,231
  330,678
  384,657
  443,094
  505,890
  572,948
  644,163
  719,444
  798,713
  881,909
  968,994
  1,059,955
  1,154,805
  1,253,581
  1,356,353
  1,463,212
  1,574,278
Debt-to-equity ratio
  0.974
  1.420
  1.640
  1.770
  1.860
  1.910
  1.940
  1.970
  1.990
  2.000
  2.010
  2.010
  2.020
  2.020
  2.020
  2.030
  2.030
  2.030
  2.030
  2.030
  2.030
  2.030
  2.030
  2.030
  2.040
  2.040
  2.040
  2.040
  2.040
  2.040
  2.040
Adjusted equity ratio
  0.317
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -13
  637
  1,582
  2,917
  4,741
  7,156
  10,266
  14,171
  18,963
  24,722
  31,515
  39,394
  48,393
  58,534
  69,824
  82,257
  95,820
  110,493
  126,252
  143,072
  160,927
  179,794
  199,654
  220,493
  242,300
  265,075
  288,820
  313,546
  339,270
  366,016
  393,815
Depreciation, amort., depletion, $m
  228
  364
  562
  841
  1,220
  1,721
  2,366
  3,176
  4,171
  5,367
  6,779
  8,418
  10,291
  12,405
  14,759
  17,354
  20,187
  23,254
  26,549
  30,069
  33,806
  37,757
  41,917
  46,283
  50,853
  55,627
  60,605
  65,789
  71,182
  76,790
  82,619
Funds from operations, $m
  204
  1,001
  2,144
  3,758
  5,961
  8,878
  12,633
  17,347
  23,134
  30,089
  38,294
  47,812
  58,685
  70,939
  84,583
  99,611
  116,007
  133,747
  152,802
  173,141
  194,733
  217,551
  241,571
  266,776
  293,154
  320,702
  349,424
  379,334
  410,452
  442,806
  476,434
Change in working capital, $m
  -46
  150
  218
  306
  416
  550
  708
  889
  1,092
  1,313
  1,550
  1,800
  2,057
  2,320
  2,585
  2,849
  3,111
  3,367
  3,619
  3,864
  4,104
  4,338
  4,568
  4,794
  5,018
  5,242
  5,466
  5,692
  5,922
  6,158
  6,400
Cash from operations, $m
  250
  851
  1,926
  3,452
  5,545
  8,327
  11,924
  16,458
  22,042
  28,775
  36,744
  46,012
  56,627
  68,619
  81,997
  96,761
  112,896
  130,379
  149,183
  169,277
  190,629
  213,213
  237,003
  261,981
  288,135
  315,460
  343,959
  373,642
  404,530
  436,649
  470,034
Maintenance CAPEX, $m
  0
  -227
  -364
  -562
  -841
  -1,220
  -1,721
  -2,366
  -3,176
  -4,171
  -5,367
  -6,779
  -8,418
  -10,291
  -12,405
  -14,759
  -17,354
  -20,187
  -23,254
  -26,549
  -30,069
  -33,806
  -37,757
  -41,917
  -46,283
  -50,853
  -55,627
  -60,605
  -65,789
  -71,182
  -76,790
New CAPEX, $m
  -100
  -1,884
  -2,737
  -3,845
  -5,233
  -6,917
  -8,902
  -11,178
  -13,723
  -16,505
  -19,485
  -22,617
  -25,858
  -29,162
  -32,491
  -35,811
  -39,094
  -42,321
  -45,480
  -48,565
  -51,576
  -54,521
  -57,409
  -60,253
  -63,070
  -65,877
  -68,693
  -71,538
  -74,430
  -77,391
  -80,438
Cash from investing activities, $m
  -88
  -2,111
  -3,101
  -4,407
  -6,074
  -8,137
  -10,623
  -13,544
  -16,899
  -20,676
  -24,852
  -29,396
  -34,276
  -39,453
  -44,896
  -50,570
  -56,448
  -62,508
  -68,734
  -75,114
  -81,645
  -88,327
  -95,166
  -102,170
  -109,353
  -116,730
  -124,320
  -132,143
  -140,219
  -148,573
  -157,228
Free cash flow, $m
  162
  -1,260
  -1,175
  -955
  -529
  190
  1,301
  2,913
  5,142
  8,100
  11,892
  16,616
  22,352
  29,165
  37,101
  46,191
  56,448
  67,871
  80,450
  94,163
  108,984
  124,886
  141,838
  159,812
  178,783
  198,730
  219,639
  241,500
  264,311
  288,076
  312,806
Issuance/(repayment) of debt, $m
  17
  1,747
  2,536
  3,562
  4,848
  6,409
  8,248
  10,357
  12,714
  15,292
  18,052
  20,955
  23,957
  27,019
  30,103
  33,179
  36,220
  39,210
  42,137
  44,995
  47,786
  50,514
  53,189
  55,824
  58,434
  61,035
  63,644
  66,280
  68,960
  71,702
  74,525
Issuance/(repurchase) of shares, $m
  2
  217
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -94
  1,964
  2,536
  3,562
  4,848
  6,409
  8,248
  10,357
  12,714
  15,292
  18,052
  20,955
  23,957
  27,019
  30,103
  33,179
  36,220
  39,210
  42,137
  44,995
  47,786
  50,514
  53,189
  55,824
  58,434
  61,035
  63,644
  66,280
  68,960
  71,702
  74,525
Total cash flow (excl. dividends), $m
  68
  704
  1,361
  2,608
  4,319
  6,599
  9,549
  13,270
  17,857
  23,391
  29,945
  37,571
  46,309
  56,184
  67,205
  79,370
  92,669
  107,082
  122,587
  139,158
  156,770
  175,400
  195,027
  215,636
  237,217
  259,765
  283,283
  307,779
  333,270
  359,778
  387,332
Retained Cash Flow (-), $m
  123
  -854
  -1,243
  -1,747
  -2,377
  -3,142
  -4,044
  -5,078
  -6,234
  -7,498
  -8,851
  -10,274
  -11,747
  -13,248
  -14,760
  -16,268
  -17,759
  -19,225
  -20,660
  -22,062
  -23,430
  -24,768
  -26,079
  -27,371
  -28,651
  -29,926
  -31,205
  -32,498
  -33,812
  -35,157
  -36,541
Prev. year cash balance distribution, $m
 
  170
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  20
  118
  861
  1,942
  3,456
  5,505
  8,192
  11,623
  15,894
  21,093
  27,296
  34,563
  42,936
  52,445
  63,102
  74,909
  87,856
  101,926
  117,096
  133,340
  150,632
  168,947
  188,265
  208,566
  229,839
  252,077
  275,282
  299,459
  324,622
  350,791
Discount rate, %
 
  7.20
  7.56
  7.94
  8.33
  8.75
  9.19
  9.65
  10.13
  10.64
  11.17
  11.73
  12.31
  12.93
  13.58
  14.26
  14.97
  15.72
  16.50
  17.33
  18.19
  19.10
  20.06
  21.06
  22.11
  23.22
  24.38
  25.60
  26.88
  28.22
  29.64
PV of cash for distribution, $m
 
  19
  102
  685
  1,410
  2,272
  3,248
  4,299
  5,371
  6,399
  7,316
  8,060
  8,578
  8,837
  8,824
  8,548
  8,041
  7,346
  6,520
  5,623
  4,710
  3,833
  3,027
  2,321
  1,725
  1,243
  867
  585
  381
  240
  146
Current shareholders' claim on cash, %
  100
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0

Methanex Corporation produces and supplies methanol in the Asia Pacific, North America, Europe, and South America. It also purchases methanol produced by others under methanol offtake contracts and on the spot market. The company was founded in 1968 and is headquartered in Vancouver, Canada.

FINANCIAL RATIOS  of  Methanex (MEOH)

Valuation Ratios
P/E Ratio -299.2
Price to Sales 1.9
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 15.6
Price to Free Cash Flow 25.9
Growth Rates
Sales Growth Rate -10.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -76.5%
Cap. Spend. - 3 Yr. Gr. Rate -29.6%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 94.1%
Total Debt to Equity 97.4%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 6.1%
Return On Total Capital -0.4%
Ret/ On T. Cap. - 3 Yr. Avg. 6.6%
Return On Equity -0.8%
Return On Equity - 3 Yr. Avg. 12.4%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 25.3%
Gross Margin - 3 Yr. Avg. 28.4%
EBITDA Margin 13.7%
EBITDA Margin - 3 Yr. Avg. 20.8%
Operating Margin 1.4%
Oper. Margin - 3 Yr. Avg. 11.2%
Pre-Tax Margin -1.9%
Pre-Tax Margin - 3 Yr. Avg. 9.4%
Net Profit Margin -0.7%
Net Profit Margin - 3 Yr. Avg. 7.5%
Effective Tax Rate 26.3%
Eff/ Tax Rate - 3 Yr. Avg. 18.3%
Payout Ratio -761.5%

MEOH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MEOH stock intrinsic value calculation we used $1998 million for the last fiscal year's total revenue generated by Methanex. The default revenue input number comes from 2016 income statement of Methanex. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our MEOH stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.2%, whose default value for MEOH is calculated based on our internal credit rating of Methanex, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Methanex.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of MEOH stock the variable cost ratio is equal to 17.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1630 million in the base year in the intrinsic value calculation for MEOH stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Methanex.

Corporate tax rate of 27% is the nominal tax rate for Methanex. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the MEOH stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for MEOH are equal to 157.1%.

Life of production assets of 13.8 years is the average useful life of capital assets used in Methanex operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for MEOH is equal to 12.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1597 million for Methanex - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 87.308 million for Methanex is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Methanex at the current share price and the inputted number of shares is $3.8 billion.

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COMPANY NEWS

▶ ETFs with exposure to Methanex Corp. : August 11, 2017   [Aug-11-17 05:58PM  Capital Cube]
▶ Methanex posts 2Q profit   [Jul-27-17 11:46PM  Associated Press]
▶ Methanex Reports Second Quarter 2017 Earnings   [Jul-26-17 05:10PM  GlobeNewswire]
▶ Methanex Corporation Notice of Cash Dividend   [Jul-20-17 06:15PM  GlobeNewswire]
▶ Top Ranked Value Stocks to Buy for May 22nd   [May-22-17 08:57AM  Zacks]
▶ Top Ranked Income Stocks to Buy for May 19th   [May-19-17 10:27AM  Zacks]
▶ Top Ranked Value Stocks to Buy for May 18th   [May-18-17 06:40AM  Zacks]
▶ Top Ranked Income Stocks to Buy for May 15th   [May-15-17 10:33AM  Zacks]
▶ Top Ranked Growth Stocks to Buy for May 12th   [May-12-17 10:37AM  Zacks]
▶ Top Ranked Value Stocks to Buy for May 8th   [May-08-17 10:12AM  Zacks]
▶ Top Ranked Income Stocks to Buy for May 4th   [May-04-17 10:40AM  Zacks]
▶ Top Ranked Growth Stocks to Buy for May 2nd   [May-02-17 11:48AM  Zacks]
▶ ETFs with exposure to Methanex Corp. : May 1, 2017   [May-01-17 04:06PM  Capital Cube]
▶ Methanex Corporation-Notice of Cash Dividend   [Apr-27-17 06:20PM  Marketwired]
▶ Methanex beats 1Q profit forecasts   [Apr-26-17 05:58PM  Associated Press]
▶ New Strong Buy Stocks for April 19th   [Apr-19-17 09:52AM  Zacks]
▶ Why Methanex (MEOH) Stock Might be a Great Pick   [Mar-31-17 08:50AM  Zacks]
▶ Methanex Comments on 13D Filing by Largest Shareholder   [Mar-27-17 08:30AM  Marketwired]
▶ Methanex Announces a 5% Share Repurchase Program   [Mar-06-17 08:30AM  Marketwired]
▶ Methanex Corporation - Notice of Cash Dividend   [Jan-26-17 05:00PM  Marketwired]
Stock chart of MEOH Financial statements of MEOH
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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