Intrinsic value of Myers Industries - MYE

Previous Close

$19.70

  Intrinsic Value

$14.61

stock screener

  Rating & Target

sell

-26%

Previous close

$19.70

 
Intrinsic value

$14.61

 
Up/down potential

-26%

 
Rating

sell

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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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
  8.30
  7.97
  7.67
  7.41
  7.17
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.50
  5.45
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
Revenue, $m
  558
  604
  652
  703
  755
  809
  865
  923
  984
  1,047
  1,113
  1,181
  1,253
  1,327
  1,404
  1,485
  1,570
  1,658
  1,750
  1,846
  1,946
  2,051
  2,161
  2,277
  2,397
  2,523
  2,655
  2,794
  2,939
  3,091
  3,250
Variable operating expenses, $m
 
  398
  429
  461
  495
  530
  567
  605
  644
  685
  728
  766
  812
  860
  911
  963
  1,018
  1,075
  1,135
  1,197
  1,262
  1,330
  1,402
  1,476
  1,554
  1,636
  1,722
  1,812
  1,906
  2,004
  2,108
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
  580
  616
  653
  691
  731
  773
  817
  861
  907
  956
  1,000
  1,051
  1,105
  1,163
  1,221
  1,282
  1,346
  1,413
  1,482
  1,554
  1,629
  1,708
  1,790
  1,876
  1,966
  2,060
  2,159
  2,261
  2,368
  2,481
Operating income, $m
  16
  24
  36
  49
  63
  77
  92
  107
  123
  140
  158
  182
  201
  221
  242
  264
  288
  312
  338
  364
  393
  422
  453
  486
  521
  557
  595
  636
  678
  722
  769
EBITDA, $m
  51
  58
  73
  88
  104
  121
  138
  156
  175
  195
  215
  237
  260
  283
  308
  334
  361
  389
  419
  451
  484
  518
  554
  593
  633
  675
  719
  766
  815
  867
  921
Interest expense (income), $m
  9
  9
  10
  11
  12
  14
  15
  16
  18
  19
  21
  22
  24
  26
  28
  30
  32
  34
  36
  38
  40
  43
  45
  48
  51
  54
  57
  60
  63
  67
  71
Earnings before tax, $m
  8
  15
  26
  38
  50
  63
  77
  91
  105
  121
  137
  159
  177
  195
  215
  235
  256
  278
  302
  326
  352
  380
  408
  438
  470
  503
  539
  576
  614
  655
  699
Tax expense, $m
  6
  4
  7
  10
  14
  17
  21
  24
  28
  33
  37
  43
  48
  53
  58
  63
  69
  75
  81
  88
  95
  102
  110
  118
  127
  136
  145
  155
  166
  177
  189
Net income, $m
  1
  11
  19
  28
  37
  46
  56
  66
  77
  88
  100
  116
  129
  143
  157
  171
  187
  203
  220
  238
  257
  277
  298
  320
  343
  367
  393
  420
  449
  479
  510

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
  405
  437
  471
  506
  542
  580
  619
  659
  702
  746
  792
  840
  889
  941
  995
  1,052
  1,111
  1,173
  1,237
  1,305
  1,375
  1,449
  1,526
  1,607
  1,691
  1,780
  1,873
  1,970
  2,072
  2,178
Adjusted assets (=assets-cash), $m
  374
  405
  437
  471
  506
  542
  580
  619
  659
  702
  746
  792
  840
  889
  941
  995
  1,052
  1,111
  1,173
  1,237
  1,305
  1,375
  1,449
  1,526
  1,607
  1,691
  1,780
  1,873
  1,970
  2,072
  2,178
Revenue / Adjusted assets
  1.492
  1.491
  1.492
  1.493
  1.492
  1.493
  1.491
  1.491
  1.493
  1.491
  1.492
  1.491
  1.492
  1.493
  1.492
  1.492
  1.492
  1.492
  1.492
  1.492
  1.491
  1.492
  1.491
  1.492
  1.492
  1.492
  1.492
  1.492
  1.492
  1.492
  1.492
Average production assets, $m
  175
  189
  204
  220
  236
  253
  271
  289
  308
  328
  348
  370
  392
  415
  440
  465
  491
  519
  548
  578
  609
  642
  677
  713
  750
  790
  831
  874
  920
  967
  1,017
Working capital, $m
  62
  59
  63
  68
  73
  78
  84
  90
  95
  102
  108
  115
  122
  129
  136
  144
  152
  161
  170
  179
  189
  199
  210
  221
  233
  245
  258
  271
  285
  300
  315
Total debt, $m
  190
  214
  239
  265
  292
  320
  349
  379
  411
  444
  478
  513
  550
  588
  629
  671
  714
  760
  808
  857
  909
  964
  1,021
  1,080
  1,143
  1,208
  1,277
  1,348
  1,424
  1,502
  1,585
Total liabilities, $m
  289
  313
  338
  364
  391
  419
  448
  478
  510
  543
  577
  612
  649
  687
  728
  770
  813
  859
  907
  956
  1,008
  1,063
  1,120
  1,179
  1,242
  1,307
  1,376
  1,447
  1,523
  1,601
  1,684
Total equity, $m
  93
  92
  99
  107
  115
  123
  132
  140
  150
  159
  169
  180
  191
  202
  214
  226
  239
  252
  266
  281
  296
  312
  329
  346
  365
  384
  404
  425
  447
  470
  494
Total liabilities and equity, $m
  382
  405
  437
  471
  506
  542
  580
  618
  660
  702
  746
  792
  840
  889
  942
  996
  1,052
  1,111
  1,173
  1,237
  1,304
  1,375
  1,449
  1,525
  1,607
  1,691
  1,780
  1,872
  1,970
  2,071
  2,178
Debt-to-equity ratio
  2.043
  2.330
  2.410
  2.480
  2.540
  2.600
  2.650
  2.700
  2.740
  2.780
  2.820
  2.850
  2.890
  2.910
  2.940
  2.970
  2.990
  3.010
  3.030
  3.050
  3.070
  3.090
  3.100
  3.120
  3.130
  3.150
  3.160
  3.170
  3.180
  3.190
  3.210
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
  11
  19
  28
  37
  46
  56
  66
  77
  88
  100
  116
  129
  143
  157
  171
  187
  203
  220
  238
  257
  277
  298
  320
  343
  367
  393
  420
  449
  479
  510
Depreciation, amort., depletion, $m
  35
  34
  36
  39
  41
  44
  46
  49
  52
  55
  58
  55
  59
  62
  66
  69
  73
  77
  82
  86
  91
  96
  101
  106
  112
  118
  124
  131
  137
  144
  152
Funds from operations, $m
  22
  45
  56
  67
  78
  90
  102
  115
  129
  143
  158
  171
  188
  205
  222
  241
  260
  281
  302
  325
  348
  373
  399
  426
  455
  485
  517
  551
  586
  623
  662
Change in working capital, $m
  -12
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
Cash from operations, $m
  34
  41
  51
  62
  73
  85
  97
  110
  123
  137
  151
  165
  181
  197
  215
  233
  252
  272
  293
  315
  338
  363
  388
  415
  443
  473
  504
  537
  572
  608
  646
Maintenance CAPEX, $m
  0
  -26
  -28
  -30
  -33
  -35
  -38
  -40
  -43
  -46
  -49
  -52
  -55
  -59
  -62
  -66
  -69
  -73
  -77
  -82
  -86
  -91
  -96
  -101
  -106
  -112
  -118
  -124
  -131
  -137
  -144
New CAPEX, $m
  -13
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -48
  -50
Cash from investing activities, $m
  -16
  -41
  -43
  -46
  -49
  -52
  -56
  -58
  -62
  -66
  -70
  -73
  -77
  -82
  -86
  -91
  -95
  -101
  -106
  -112
  -117
  -124
  -130
  -137
  -144
  -151
  -159
  -167
  -176
  -185
  -194
Free cash flow, $m
  18
  0
  8
  16
  24
  32
  41
  51
  61
  71
  82
  91
  103
  116
  129
  142
  156
  171
  187
  203
  221
  239
  258
  278
  299
  322
  345
  370
  396
  423
  452
Issuance/(repayment) of debt, $m
  -4
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  42
  44
  46
  48
  50
  52
  54
  57
  60
  62
  65
  68
  72
  75
  79
  83
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
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  42
  44
  46
  48
  50
  52
  54
  57
  60
  62
  65
  68
  72
  75
  79
  83
Total cash flow (excl. dividends), $m
  17
  24
  33
  42
  51
  60
  71
  81
  92
  104
  116
  127
  140
  154
  169
  184
  200
  217
  235
  253
  273
  293
  315
  338
  362
  387
  414
  442
  471
  502
  535
Retained Cash Flow (-), $m
  5
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
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
 
  25
  25
  34
  43
  52
  62
  72
  83
  94
  106
  116
  129
  143
  157
  172
  187
  203
  221
  239
  257
  277
  298
  320
  343
  368
  393
  420
  449
  479
  510
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
 
  23
  21
  26
  29
  31
  33
  33
  33
  31
  29
  27
  24
  21
  18
  15
  13
  10
  8
  6
  5
  3
  2
  2
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
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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 591.4
Price to Sales 1.1
Price to Book 6.4
Price to Tangible Book
Price to Cash Flow 17.4
Price to Free Cash Flow 28.2
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 8.3% 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 30.643 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.

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COMPANY NEWS

▶ Myers Industries Announces Date for 2018 Annual Meeting   [Feb-13-18 08:30AM  Business Wire]
▶ 5 Best Stocks Worth Buying on Upgraded Broker Ratings   [Jan-08-18 03:00PM  InvestorPlace]
▶ Myers Industries Announces Quarterly Dividend   [Nov-08-17 08:30AM  Business Wire]
▶ MYERS INDUSTRIES INC to Host Earnings Call   [Nov-07-17 08:10AM  ACCESSWIRE]
▶ Myers posts 3Q profit   [07:39AM  Associated Press]
▶ 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]
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.

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