Intrinsic value of Methanex - MEOH

Previous Close

$60.64

  Intrinsic Value

$1,893

stock screener

  Rating & Target

str. buy

+999%

Previous close

$60.64

 
Intrinsic value

$1,893

 
Up/down potential

+999%

 
Rating

str. buy

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 0001), $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 4.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  53.20
  48.38
  44.04
  40.14
  36.62
  33.46
  30.62
  28.05
  25.75
  23.67
  21.81
  20.13
  18.61
  17.25
  16.03
  14.92
  13.93
  13.04
  12.23
  11.51
  10.86
  10.27
  9.75
  9.27
  8.84
  8.46
  8.11
  7.80
  7.52
  7.27
Revenue, $m
  4,689
  6,957
  10,022
  14,044
  19,187
  25,608
  33,448
  42,831
  53,860
  66,610
  81,136
  97,465
  115,606
  135,550
  157,274
  180,746
  205,926
  232,776
  261,255
  291,328
  322,967
  356,148
  390,861
  427,101
  464,877
  504,207
  545,119
  587,654
  631,860
  677,798
Variable operating expenses, $m
  2,710
  4,021
  5,792
  8,117
  11,090
  14,801
  19,333
  24,757
  31,131
  38,501
  46,896
  56,335
  66,820
  78,348
  90,904
  104,471
  119,025
  134,544
  151,005
  168,388
  186,675
  205,854
  225,917
  246,864
  268,699
  291,431
  315,079
  339,664
  365,215
  391,767
Fixed operating expenses, $m
  851
  870
  889
  909
  929
  949
  970
  991
  1,013
  1,036
  1,058
  1,082
  1,105
  1,130
  1,155
  1,180
  1,206
  1,232
  1,260
  1,287
  1,316
  1,345
  1,374
  1,404
  1,435
  1,467
  1,499
  1,532
  1,566
  1,600
Total operating expenses, $m
  3,561
  4,891
  6,681
  9,026
  12,019
  15,750
  20,303
  25,748
  32,144
  39,537
  47,954
  57,417
  67,925
  79,478
  92,059
  105,651
  120,231
  135,776
  152,265
  169,675
  187,991
  207,199
  227,291
  248,268
  270,134
  292,898
  316,578
  341,196
  366,781
  393,367
Operating income, $m
  1,127
  2,066
  3,340
  5,018
  7,168
  9,857
  13,145
  17,083
  21,716
  27,074
  33,181
  40,049
  47,680
  56,072
  65,215
  75,095
  85,695
  96,999
  108,990
  121,653
  134,976
  148,950
  163,569
  178,832
  194,743
  211,308
  228,541
  246,458
  265,079
  284,431
EBITDA, $m
  1,482
  2,593
  4,098
  6,081
  8,621
  11,795
  15,676
  20,325
  25,792
  32,115
  39,321
  47,425
  56,430
  66,331
  77,118
  88,774
  101,280
  114,616
  128,762
  143,702
  159,419
  175,904
  193,150
  211,156
  229,926
  249,468
  269,797
  290,933
  312,900
  335,728
Interest expense (income), $m
  83
  94
  193
  332
  519
  764
  1,078
  1,469
  1,948
  2,520
  3,193
  3,970
  4,856
  5,852
  6,959
  8,175
  9,500
  10,932
  12,468
  14,105
  15,842
  17,677
  19,606
  21,630
  23,748
  25,958
  28,262
  30,661
  33,156
  35,751
  38,447
Earnings before tax, $m
  1,033
  1,873
  3,008
  4,499
  6,404
  8,780
  11,676
  15,136
  19,196
  23,882
  29,211
  35,192
  41,828
  49,114
  57,040
  65,595
  74,763
  84,531
  94,885
  105,811
  117,300
  129,344
  141,939
  155,085
  168,785
  183,046
  197,880
  213,301
  229,329
  245,984
Tax expense, $m
  279
  506
  812
  1,215
  1,729
  2,370
  3,152
  4,087
  5,183
  6,448
  7,887
  9,502
  11,294
  13,261
  15,401
  17,711
  20,186
  22,823
  25,619
  28,569
  31,671
  34,923
  38,323
  41,873
  45,572
  49,422
  53,428
  57,591
  61,919
  66,416
Net income, $m
  754
  1,367
  2,196
  3,284
  4,675
  6,409
  8,523
  11,049
  14,013
  17,434
  21,324
  25,690
  30,535
  35,853
  41,639
  47,884
  54,577
  61,708
  69,266
  77,242
  85,629
  94,421
  103,615
  113,212
  123,213
  133,624
  144,453
  155,710
  167,410
  179,568

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  7,062
  10,478
  15,093
  21,151
  28,897
  38,566
  50,373
  64,505
  81,114
  100,317
  122,192
  146,784
  174,105
  204,142
  236,859
  272,207
  310,130
  350,566
  393,456
  438,748
  486,396
  536,368
  588,645
  643,224
  700,116
  759,347
  820,963
  885,021
  951,597
  1,020,781
Adjusted assets (=assets-cash), $m
  7,062
  10,478
  15,093
  21,151
  28,897
  38,566
  50,373
  64,505
  81,114
  100,317
  122,192
  146,784
  174,105
  204,142
  236,859
  272,207
  310,130
  350,566
  393,456
  438,748
  486,396
  536,368
  588,645
  643,224
  700,116
  759,347
  820,963
  885,021
  951,597
  1,020,781
Revenue / Adjusted assets
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
  0.664
Average production assets, $m
  4,684
  6,950
  10,012
  14,030
  19,168
  25,582
  33,414
  42,789
  53,806
  66,544
  81,055
  97,367
  115,490
  135,415
  157,117
  180,565
  205,720
  232,543
  260,994
  291,037
  322,644
  355,792
  390,470
  426,674
  464,412
  503,702
  544,574
  587,066
  631,228
  677,121
Working capital, $m
  370
  550
  792
  1,109
  1,516
  2,023
  2,642
  3,384
  4,255
  5,262
  6,410
  7,700
  9,133
  10,708
  12,425
  14,279
  16,268
  18,389
  20,639
  23,015
  25,514
  28,136
  30,878
  33,741
  36,725
  39,832
  43,064
  46,425
  49,917
  53,546
Total debt, $m
  3,224
  5,530
  8,645
  12,734
  17,963
  24,490
  32,460
  41,998
  53,210
  66,171
  80,937
  97,537
  115,979
  136,253
  158,337
  182,198
  207,795
  235,090
  264,041
  294,612
  326,774
  360,506
  395,793
  432,634
  471,036
  511,017
  552,607
  595,847
  640,785
  687,484
Total liabilities, $m
  4,767
  7,073
  10,188
  14,277
  19,505
  26,032
  34,002
  43,541
  54,752
  67,714
  82,480
  99,079
  117,521
  137,796
  159,880
  183,740
  209,338
  236,632
  265,583
  296,155
  328,317
  362,048
  397,336
  434,176
  472,578
  512,559
  554,150
  597,389
  642,328
  689,027
Total equity, $m
  2,295
  3,405
  4,905
  6,874
  9,391
  12,534
  16,371
  20,964
  26,362
  32,603
  39,712
  47,705
  56,584
  66,346
  76,979
  88,467
  100,792
  113,934
  127,873
  142,593
  158,079
  174,320
  191,310
  209,048
  227,538
  246,788
  266,813
  287,632
  309,269
  331,754
Total liabilities and equity, $m
  7,062
  10,478
  15,093
  21,151
  28,896
  38,566
  50,373
  64,505
  81,114
  100,317
  122,192
  146,784
  174,105
  204,142
  236,859
  272,207
  310,130
  350,566
  393,456
  438,748
  486,396
  536,368
  588,646
  643,224
  700,116
  759,347
  820,963
  885,021
  951,597
  1,020,781
Debt-to-equity ratio
  1.400
  1.620
  1.760
  1.850
  1.910
  1.950
  1.980
  2.000
  2.020
  2.030
  2.040
  2.040
  2.050
  2.050
  2.060
  2.060
  2.060
  2.060
  2.060
  2.070
  2.070
  2.070
  2.070
  2.070
  2.070
  2.070
  2.070
  2.070
  2.070
  2.070
Adjusted equity ratio
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325
  0.325

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  754
  1,367
  2,196
  3,284
  4,675
  6,409
  8,523
  11,049
  14,013
  17,434
  21,324
  25,690
  30,535
  35,853
  41,639
  47,884
  54,577
  61,708
  69,266
  77,242
  85,629
  94,421
  103,615
  113,212
  123,213
  133,624
  144,453
  155,710
  167,410
  179,568
Depreciation, amort., depletion, $m
  355
  527
  758
  1,063
  1,452
  1,938
  2,531
  3,242
  4,076
  5,041
  6,140
  7,376
  8,749
  10,259
  11,903
  13,679
  15,585
  17,617
  19,772
  22,048
  24,443
  26,954
  29,581
  32,324
  35,183
  38,159
  41,256
  44,475
  47,820
  51,297
Funds from operations, $m
  1,109
  1,893
  2,954
  4,347
  6,127
  8,347
  11,055
  14,291
  18,089
  22,475
  27,464
  33,067
  39,284
  46,112
  53,542
  61,563
  70,162
  79,325
  89,038
  99,290
  110,071
  121,375
  133,196
  145,536
  158,396
  171,783
  185,708
  200,185
  215,230
  230,865
Change in working capital, $m
  129
  179
  242
  318
  406
  507
  619
  741
  871
  1,007
  1,147
  1,290
  1,433
  1,576
  1,716
  1,854
  1,989
  2,121
  2,250
  2,376
  2,499
  2,621
  2,742
  2,863
  2,984
  3,107
  3,232
  3,360
  3,492
  3,629
Cash from operations, $m
  981
  1,714
  2,712
  4,029
  5,721
  7,840
  10,435
  13,549
  17,218
  21,467
  26,317
  31,777
  37,851
  44,536
  51,826
  59,709
  68,173
  77,204
  86,788
  96,914
  107,572
  118,753
  130,454
  142,673
  155,411
  168,676
  182,476
  196,825
  211,738
  227,236
Maintenance CAPEX, $m
  -232
  -355
  -527
  -758
  -1,063
  -1,452
  -1,938
  -2,531
  -3,242
  -4,076
  -5,041
  -6,140
  -7,376
  -8,749
  -10,259
  -11,903
  -13,679
  -15,585
  -17,617
  -19,772
  -22,048
  -24,443
  -26,954
  -29,581
  -32,324
  -35,183
  -38,159
  -41,256
  -44,475
  -47,820
New CAPEX, $m
  -1,626
  -2,266
  -3,061
  -4,018
  -5,138
  -6,414
  -7,832
  -9,374
  -11,017
  -12,738
  -14,511
  -16,313
  -18,123
  -19,924
  -21,702
  -23,448
  -25,156
  -26,823
  -28,451
  -30,043
  -31,607
  -33,148
  -34,678
  -36,204
  -37,738
  -39,290
  -40,872
  -42,492
  -44,162
  -45,892
Cash from investing activities, $m
  -1,858
  -2,621
  -3,588
  -4,776
  -6,201
  -7,866
  -9,770
  -11,905
  -14,259
  -16,814
  -19,552
  -22,453
  -25,499
  -28,673
  -31,961
  -35,351
  -38,835
  -42,408
  -46,068
  -49,815
  -53,655
  -57,591
  -61,632
  -65,785
  -70,062
  -74,473
  -79,031
  -83,748
  -88,637
  -93,712
Free cash flow, $m
  -877
  -907
  -875
  -747
  -480
  -26
  665
  1,644
  2,959
  4,653
  6,765
  9,323
  12,351
  15,863
  19,865
  24,358
  29,338
  34,796
  40,721
  47,099
  53,917
  61,162
  68,822
  76,887
  85,349
  94,203
  103,445
  113,077
  123,101
  133,523
Issuance/(repayment) of debt, $m
  1,657
  2,306
  3,115
  4,089
  5,229
  6,527
  7,970
  9,539
  11,211
  12,962
  14,766
  16,600
  18,442
  20,275
  22,084
  23,860
  25,598
  27,294
  28,951
  30,572
  32,162
  33,731
  35,287
  36,841
  38,402
  39,981
  41,590
  43,239
  44,939
  46,699
Issuance/(repurchase) of shares, $m
  40
  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  
  1,697
  2,306
  3,115
  4,089
  5,229
  6,527
  7,970
  9,539
  11,211
  12,962
  14,766
  16,600
  18,442
  20,275
  22,084
  23,860
  25,598
  27,294
  28,951
  30,572
  32,162
  33,731
  35,287
  36,841
  38,402
  39,981
  41,590
  43,239
  44,939
  46,699
Total cash flow (excl. dividends), $m
  819
  1,399
  2,240
  3,342
  4,748
  6,501
  8,635
  11,183
  14,170
  17,615
  21,531
  25,923
  30,793
  36,137
  41,949
  48,218
  54,936
  62,090
  69,672
  77,670
  86,080
  94,894
  104,110
  113,728
  123,751
  134,184
  145,035
  156,316
  168,040
  180,223
Retained Cash Flow (-), $m
  -794
  -1,110
  -1,500
  -1,969
  -2,518
  -3,143
  -3,837
  -4,593
  -5,398
  -6,241
  -7,110
  -7,992
  -8,879
  -9,762
  -10,633
  -11,488
  -12,325
  -13,142
  -13,939
  -14,720
  -15,486
  -16,241
  -16,990
  -17,738
  -18,490
  -19,250
  -20,025
  -20,819
  -21,637
  -22,485
Prev. year cash balance distribution, $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 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
  289
  740
  1,373
  2,231
  3,358
  4,798
  6,590
  8,772
  11,374
  14,421
  17,931
  21,914
  26,375
  31,316
  36,730
  42,611
  48,949
  55,732
  62,951
  70,594
  78,653
  87,120
  95,990
  105,261
  114,934
  125,011
  135,497
  146,402
  157,738
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  24
  265
  644
  1,130
  1,729
  2,437
  3,241
  4,119
  5,039
  5,963
  6,848
  7,652
  8,332
  8,855
  9,194
  9,334
  9,271
  9,014
  8,581
  7,999
  7,302
  6,526
  5,710
  4,889
  4,095
  3,353
  2,683
  2,096
  1,598
  1,188
Current shareholders' claim on cash, %
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2
  99.2

Methanex Corp is a Canada-based producer and supplier of methanol to a range of international markets. The Company operates production sites in Canada, Chile, Egypt, New Zealand, the United States, as well as Trinidad and Tobago. Its global operations are supported by a global supply chain of terminals, storage facilities and a fleet of methanol ocean tankers. The Company's subsidiary, Waterfront Shipping Company Limited, operates its fleet, which is made up of over 20 vessels ranging from 3,000 to 50,000 deadweight tons of capacity. It has over three production facilities in New Zealand that supply methanol primarily to customers in Asia Pacific. The Company operates over two plants in Trinidad, Titan and Atlas, which supply methanol to markets in North America, Europe, Asia Pacific and South America. Its joint venture facility in Egypt supplies methanol to markets in Europe and Asia Pacific. Its plant in Medicine Hat, Alberta, supplies methanol to customers in North America.

FINANCIAL RATIOS  of  Methanex (MEOH)

Valuation Ratios
P/E Ratio -419
Price to Sales 2.7
Price to Book 3.4
Price to Tangible Book
Price to Cash Flow 21.8
Price to Free Cash Flow 36.3
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 $3060.642 million for the last fiscal year's total revenue generated by Methanex. The default revenue input number comes from 0001 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 53.2% 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 4.3%, 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 57.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $833 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 6% 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 99.9%.

Life of production assets of 13.2 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 7.9%. 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 - $1500.764 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 79.483 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 $4.8 billion.

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COMPANY NEWS

▶ Methanex Corporation Notice of Cash Dividend   [Nov-13-18 03:10PM  GlobeNewswire]
▶ Methanex: 3Q Earnings Snapshot   [Oct-24-18 06:08PM  Associated Press]
▶ Methanex Reports Third Quarter 2018 Earnings   [05:19PM  GlobeNewswire]
▶ Theres Value in Damaged Papa Johns Pizza   [Oct-05-18 08:00PM  Barrons.com]
▶ Methanex: 2Q Earnings Snapshot   [Jul-25-18 07:42PM  Associated Press]
▶ Methanex Corporation Notice of Cash Dividend   [Jul-19-18 06:02PM  GlobeNewswire]

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