Intrinsic value of Myers Industries - MYE

Previous Close

$18.80

  Intrinsic Value

$3.25

stock screener

  Rating & Target

str. sell

-83%

  Value-price divergence*

-51%

Previous close

$18.80

 
Intrinsic value

$3.25

 
Up/down potential

-83%

 
Rating

str. sell

 
Value-price divergence*

-51%

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

We calculate the intrinsic value of MYE 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 0.6

 

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, %
  -7.31
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  558
  569
  582
  597
  614
  633
  653
  675
  699
  725
  753
  783
  815
  849
  884
  923
  963
  1,006
  1,051
  1,099
  1,149
  1,203
  1,259
  1,318
  1,381
  1,446
  1,515
  1,588
  1,665
  1,746
  1,830
Variable operating expenses, $m
 
  375
  383
  393
  404
  416
  429
  444
  459
  476
  494
  508
  528
  550
  574
  598
  624
  652
  682
  713
  745
  780
  816
  855
  895
  938
  983
  1,030
  1,080
  1,132
  1,187
Fixed operating expenses, $m
 
  182
  187
  192
  196
  201
  206
  212
  217
  222
  228
  234
  239
  245
  252
  258
  264
  271
  278
  285
  292
  299
  306
  314
  322
  330
  338
  347
  355
  364
  373
Total operating expenses, $m
  542
  557
  570
  585
  600
  617
  635
  656
  676
  698
  722
  742
  767
  795
  826
  856
  888
  923
  960
  998
  1,037
  1,079
  1,122
  1,169
  1,217
  1,268
  1,321
  1,377
  1,435
  1,496
  1,560
Operating income, $m
  16
  12
  12
  12
  13
  15
  17
  20
  23
  27
  31
  42
  47
  53
  59
  67
  74
  83
  92
  102
  112
  124
  136
  149
  163
  178
  195
  212
  230
  249
  270
EBITDA, $m
  51
  44
  45
  46
  48
  51
  54
  57
  62
  67
  72
  78
  85
  93
  101
  110
  119
  130
  141
  153
  166
  180
  195
  211
  228
  246
  265
  286
  308
  331
  356
Interest expense (income), $m
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  31
  32
  34
  36
  38
Earnings before tax, $m
  8
  3
  3
  3
  4
  5
  7
  9
  11
  14
  18
  28
  33
  38
  43
  50
  57
  64
  72
  81
  90
  101
  112
  123
  136
  150
  164
  179
  196
  214
  232
Tax expense, $m
  6
  1
  1
  1
  1
  1
  2
  2
  3
  4
  5
  8
  9
  10
  12
  13
  15
  17
  19
  22
  24
  27
  30
  33
  37
  40
  44
  48
  53
  58
  63
Net income, $m
  1
  2
  2
  2
  3
  4
  5
  6
  8
  11
  13
  20
  24
  28
  32
  36
  41
  47
  53
  59
  66
  73
  81
  90
  99
  109
  120
  131
  143
  156
  170

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  8
  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
  382
  381
  390
  400
  412
  424
  438
  453
  469
  486
  505
  525
  546
  569
  593
  618
  645
  674
  705
  737
  770
  806
  844
  883
  925
  969
  1,016
  1,065
  1,116
  1,170
  1,227
Adjusted assets (=assets-cash), $m
  374
  381
  390
  400
  412
  424
  438
  453
  469
  486
  505
  525
  546
  569
  593
  618
  645
  674
  705
  737
  770
  806
  844
  883
  925
  969
  1,016
  1,065
  1,116
  1,170
  1,227
Revenue / Adjusted assets
  1.492
  1.493
  1.492
  1.493
  1.490
  1.493
  1.491
  1.490
  1.490
  1.492
  1.491
  1.491
  1.493
  1.492
  1.491
  1.494
  1.493
  1.493
  1.491
  1.491
  1.492
  1.493
  1.492
  1.493
  1.493
  1.492
  1.491
  1.491
  1.492
  1.492
  1.491
Average production assets, $m
  175
  178
  182
  187
  192
  198
  204
  211
  219
  227
  236
  245
  255
  266
  277
  289
  301
  315
  329
  344
  360
  376
  394
  413
  432
  453
  474
  497
  521
  546
  573
Working capital, $m
  62
  55
  56
  58
  60
  61
  63
  66
  68
  70
  73
  76
  79
  82
  86
  89
  93
  98
  102
  107
  111
  117
  122
  128
  134
  140
  147
  154
  162
  169
  178
Total debt, $m
  190
  196
  203
  210
  219
  229
  239
  251
  263
  277
  291
  307
  323
  341
  359
  379
  400
  422
  446
  470
  497
  524
  553
  584
  616
  650
  686
  724
  764
  805
  849
Total liabilities, $m
  289
  295
  302
  309
  318
  328
  338
  350
  362
  376
  390
  406
  422
  440
  458
  478
  499
  521
  545
  569
  596
  623
  652
  683
  715
  749
  785
  823
  863
  904
  948
Total equity, $m
  93
  87
  89
  91
  93
  96
  99
  103
  106
  110
  115
  119
  124
  129
  135
  140
  147
  153
  160
  167
  175
  183
  192
  201
  210
  220
  231
  242
  253
  266
  278
Total liabilities and equity, $m
  382
  382
  391
  400
  411
  424
  437
  453
  468
  486
  505
  525
  546
  569
  593
  618
  646
  674
  705
  736
  771
  806
  844
  884
  925
  969
  1,016
  1,065
  1,116
  1,170
  1,226
Debt-to-equity ratio
  2.043
  2.260
  2.290
  2.320
  2.350
  2.380
  2.410
  2.440
  2.470
  2.510
  2.540
  2.570
  2.610
  2.640
  2.670
  2.700
  2.730
  2.760
  2.790
  2.810
  2.840
  2.860
  2.890
  2.910
  2.930
  2.960
  2.980
  3.000
  3.010
  3.030
  3.050
Adjusted equity ratio
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227
  0.227

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1
  2
  2
  2
  3
  4
  5
  6
  8
  11
  13
  20
  24
  28
  32
  36
  41
  47
  53
  59
  66
  73
  81
  90
  99
  109
  120
  131
  143
  156
  170
Depreciation, amort., depletion, $m
  35
  32
  33
  34
  35
  35
  36
  37
  39
  40
  41
  37
  38
  40
  41
  43
  45
  47
  49
  51
  54
  56
  59
  62
  64
  68
  71
  74
  78
  82
  86
Funds from operations, $m
  22
  35
  35
  36
  37
  39
  41
  44
  47
  50
  54
  57
  62
  67
  73
  79
  86
  94
  102
  110
  120
  130
  140
  152
  164
  177
  191
  205
  221
  237
  255
Change in working capital, $m
  -12
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
Cash from operations, $m
  34
  33
  34
  34
  36
  37
  39
  42
  44
  48
  52
  54
  59
  64
  70
  76
  82
  90
  97
  106
  115
  124
  135
  146
  158
  170
  184
  198
  213
  230
  247
Maintenance CAPEX, $m
  0
  -26
  -27
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -34
  -35
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -54
  -56
  -59
  -62
  -64
  -68
  -71
  -74
  -78
  -82
New CAPEX, $m
  -13
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
Cash from investing activities, $m
  -16
  -30
  -31
  -32
  -33
  -35
  -36
  -38
  -40
  -41
  -43
  -44
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -71
  -74
  -78
  -82
  -85
  -90
  -94
  -98
  -103
  -109
Free cash flow, $m
  18
  4
  3
  3
  2
  3
  3
  4
  5
  7
  9
  10
  12
  15
  19
  22
  27
  31
  36
  42
  48
  54
  61
  69
  77
  85
  95
  105
  115
  127
  139
Issuance/(repayment) of debt, $m
  -4
  6
  7
  8
  9
  10
  11
  12
  12
  13
  14
  15
  16
  18
  19
  20
  21
  22
  23
  25
  26
  28
  29
  31
  32
  34
  36
  38
  40
  42
  44
Issuance/(repurchase) of shares, $m
  3
  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 from financing (excl. dividends), $m  
  -2
  6
  7
  8
  9
  10
  11
  12
  12
  13
  14
  15
  16
  18
  19
  20
  21
  22
  23
  25
  26
  28
  29
  31
  32
  34
  36
  38
  40
  42
  44
Total cash flow (excl. dividends), $m
  17
  10
  10
  10
  11
  12
  14
  16
  18
  20
  23
  25
  29
  33
  37
  42
  48
  53
  60
  66
  74
  82
  90
  99
  109
  119
  130
  142
  155
  168
  183
Retained Cash Flow (-), $m
  5
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -11
  -11
  -12
  -12
  -13
Prev. year cash balance distribution, $m
 
  8
  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
 
  16
  8
  8
  9
  9
  11
  12
  14
  16
  19
  21
  24
  28
  32
  36
  41
  47
  53
  59
  66
  74
  82
  90
  99
  109
  120
  131
  143
  156
  170
Discount rate, %
 
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.18
  22.24
  23.35
  24.52
  25.74
  27.03
  28.38
  29.80
  31.29
  32.85
  34.50
  36.22
PV of cash for distribution, $m
 
  15
  7
  6
  6
  6
  6
  6
  6
  5
  5
  5
  4
  4
  4
  3
  3
  2
  2
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9
  99.9

Myers Industries, Inc. is an international manufacturing and distribution company. The Company operates through two segments: Material Handling and Distribution. As of December 31, 2016, the Company operated 15 manufacturing facilities, 20 sales offices, four distribution centers and three distribution branches located throughout North, Central and South America. As of December 31, 2016, the Company had approximately 15,000 manufactured products and over 13,500 distributed products. The Material Handling segment designs, manufactures and markets a range of plastic and metal products. The Distribution Segment is engaged in the distribution of tools, equipment and supplies used for tire, wheel and under vehicle service on passenger, heavy truck and off-road vehicles, and the manufacturing of tire repair materials and custom rubber products. The product line includes categories, such as tire valves and accessories, and lifts and alignment equipment.

FINANCIAL RATIOS  of  Myers Industries (MYE)

Valuation Ratios
P/E Ratio 564.4
Price to Sales 1
Price to Book 6.1
Price to Tangible Book
Price to Cash Flow 16.6
Price to Free Cash Flow 26.9
Growth Rates
Sales Growth Rate -7.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -45.8%
Cap. Spend. - 3 Yr. Gr. Rate -9.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 204.3%
Total Debt to Equity 204.3%
Interest Coverage 2
Management Effectiveness
Return On Assets 0.8%
Ret/ On Assets - 3 Yr. Avg. 1.5%
Return On Total Capital 0.3%
Ret/ On T. Cap. - 3 Yr. Avg. 1%
Return On Equity 1%
Return On Equity - 3 Yr. Avg. 3.7%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 29.6%
Gross Margin - 3 Yr. Avg. 28.4%
EBITDA Margin 9.3%
EBITDA Margin - 3 Yr. Avg. 9.5%
Operating Margin 2.9%
Oper. Margin - 3 Yr. Avg. 3.9%
Pre-Tax Margin 1.4%
Pre-Tax Margin - 3 Yr. Avg. 2.4%
Net Profit Margin 0.2%
Net Profit Margin - 3 Yr. Avg. 0.6%
Effective Tax Rate 75%
Eff/ Tax Rate - 3 Yr. Avg. 49%
Payout Ratio 1600%

MYE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MYE stock intrinsic value calculation we used $558 million for the last fiscal year's total revenue generated by Myers Industries. The default revenue input number comes from 2016 income statement of Myers Industries. 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 MYE stock valuation model: a) initial revenue growth rate of 2% 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 8.8%, whose default value for MYE is calculated based on our internal credit rating of Myers Industries, 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 Myers Industries.
    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 MYE stock the variable cost ratio is equal to 65.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $178 million in the base year in the intrinsic value calculation for MYE 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 4.7% for Myers Industries.

Corporate tax rate of 27% is the nominal tax rate for Myers Industries. 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 MYE 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 MYE are equal to 31.3%.

Life of production assets of 6.7 years is the average useful life of capital assets used in Myers Industries 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 MYE is equal to 9.7%. 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 - $93 million for Myers Industries - 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 30.68 million for Myers Industries 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 Myers Industries at the current share price and the inputted number of shares is $0.6 billion.

RELATED COMPANIES Price Int.Val. Rating
BERY Berry Global G 56.55 34.44  sell
CTIB CTI Industries 4.00 3.13  sell
PKOH Park-Ohio Hold 40.40 50.57  buy
CMT Core Molding T 21.14 63.17  str.buy
GT Goodyear Tire& 32.43 23.50  sell
TUP Tupperware Bra 59.69 44.01  sell

COMPANY NEWS

▶ Myers Industries Announces Quarterly Dividend   [Aug-07-17 08:30AM  Business Wire]
▶ Myers posts 2Q profit   [Aug-01-17 09:36PM  Associated Press]
▶ Myers Industries Announces Quarterly Dividend   [Jun-05-17 04:15PM  Business Wire]
▶ Top Ranked Income Stocks to Buy for May 16th   [May-16-17 10:35AM  Zacks]
▶ Myers posts 1Q profit   [May-08-17 07:36AM  Associated Press]
▶ Top Ranked Income Stocks to Buy for April 11th   [Apr-11-17 10:29AM  Zacks]
▶ Myers reports 4Q loss   [Mar-09-17 07:44AM  Associated Press]
▶ Myers Industries Announces Quarterly Dividend   [Mar-07-17 09:00AM  Business Wire]
▶ Myers Industries Announces Date for 2017 Annual Meeting   [Feb-17-17 03:00PM  Business Wire]
▶ Is Guaranty Bancorp (GBNK) A Good Stock To Buy?   [Dec-12-16 04:32PM  at Insider Monkey]
▶ Myers Industries Announces Quarterly Dividend   [Nov-21-16 09:15AM  Business Wire]
▶ Myers Industries Announces Quarterly Dividend   [Aug-15-16 08:55AM  Business Wire]
▶ Myers Industries Announces Quarterly Dividend   [Jun-06-16 04:30PM  Business Wire]
▶ Buckhorn® Launches New Line of Automotive Products   [Apr-04-16 02:00PM  Business Wire]
▶ Buckhorn® Expands Intrepid IBC Product Line   [Mar-23-16 02:00PM  Business Wire]
▶ CFO Moves: Chart Industries, Myers Industries   [Mar-21-16 04:40PM  at The Wall Street Journal]
Financial statements of MYE
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.