Intrinsic value of Minerals Technologies - MTX

Previous Close

$71.25

  Intrinsic Value

$48.36

stock screener

  Rating & Target

sell

-32%

Previous close

$71.25

 
Intrinsic value

$48.36

 
Up/down potential

-32%

 
Rating

sell

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

We calculate the intrinsic value of MTX 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Minerals Technologies (MTX) stock.

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, %
  -8.90
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
Revenue, $m
  1,638
  1,736
  1,839
  1,946
  2,057
  2,173
  2,295
  2,422
  2,554
  2,693
  2,838
  2,990
  3,149
  3,315
  3,490
  3,672
  3,863
  4,063
  4,273
  4,493
  4,724
  4,966
  5,220
  5,486
  5,765
  6,058
  6,365
  6,688
  7,026
  7,381
  7,754
Variable operating expenses, $m
 
  1,542
  1,629
  1,719
  1,813
  1,911
  2,013
  2,121
  2,232
  2,349
  2,472
  2,522
  2,656
  2,796
  2,943
  3,097
  3,258
  3,427
  3,604
  3,790
  3,985
  4,189
  4,403
  4,627
  4,863
  5,110
  5,369
  5,641
  5,926
  6,225
  6,540
Fixed operating expenses, $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 operating expenses, $m
  1,417
  1,542
  1,629
  1,719
  1,813
  1,911
  2,013
  2,121
  2,232
  2,349
  2,472
  2,522
  2,656
  2,796
  2,943
  3,097
  3,258
  3,427
  3,604
  3,790
  3,985
  4,189
  4,403
  4,627
  4,863
  5,110
  5,369
  5,641
  5,926
  6,225
  6,540
Operating income, $m
  221
  194
  210
  227
  244
  262
  281
  301
  322
  344
  366
  468
  493
  519
  546
  575
  605
  636
  669
  703
  740
  777
  817
  859
  903
  948
  997
  1,047
  1,100
  1,156
  1,214
EBITDA, $m
  313
  332
  352
  372
  394
  416
  439
  464
  489
  516
  543
  572
  603
  635
  668
  703
  740
  778
  818
  860
  904
  951
  999
  1,050
  1,104
  1,160
  1,219
  1,280
  1,345
  1,413
  1,484
Interest expense (income), $m
  57
  52
  58
  64
  69
  76
  82
  89
  96
  103
  111
  119
  127
  136
  145
  155
  165
  175
  186
  198
  210
  223
  236
  250
  265
  280
  296
  313
  331
  350
  369
Earnings before tax, $m
  170
  141
  152
  163
  175
  187
  199
  213
  226
  241
  256
  349
  366
  383
  401
  420
  440
  461
  483
  506
  530
  555
  581
  609
  638
  668
  700
  734
  769
  806
  845
Tax expense, $m
  35
  38
  41
  44
  47
  50
  54
  57
  61
  65
  69
  94
  99
  103
  108
  113
  119
  124
  130
  137
  143
  150
  157
  164
  172
  180
  189
  198
  208
  218
  228
Net income, $m
  133
  103
  111
  119
  128
  136
  146
  155
  165
  176
  187
  255
  267
  280
  293
  307
  321
  337
  352
  369
  387
  405
  424
  444
  466
  488
  511
  536
  561
  588
  617

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  191
  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
  2,863
  2,832
  3,000
  3,174
  3,356
  3,545
  3,744
  3,951
  4,167
  4,393
  4,630
  4,878
  5,137
  5,408
  5,693
  5,990
  6,302
  6,629
  6,971
  7,330
  7,707
  8,101
  8,515
  8,950
  9,405
  9,883
  10,384
  10,910
  11,462
  12,041
  12,648
Adjusted assets (=assets-cash), $m
  2,672
  2,832
  3,000
  3,174
  3,356
  3,545
  3,744
  3,951
  4,167
  4,393
  4,630
  4,878
  5,137
  5,408
  5,693
  5,990
  6,302
  6,629
  6,971
  7,330
  7,707
  8,101
  8,515
  8,950
  9,405
  9,883
  10,384
  10,910
  11,462
  12,041
  12,648
Revenue / Adjusted assets
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
  0.613
Average production assets, $m
  1,286
  1,363
  1,443
  1,527
  1,615
  1,706
  1,801
  1,901
  2,005
  2,114
  2,228
  2,347
  2,472
  2,603
  2,739
  2,883
  3,033
  3,190
  3,355
  3,527
  3,709
  3,898
  4,098
  4,307
  4,526
  4,756
  4,997
  5,250
  5,515
  5,794
  6,086
Working capital, $m
  455
  293
  311
  329
  348
  367
  388
  409
  432
  455
  480
  505
  532
  560
  590
  621
  653
  687
  722
  759
  798
  839
  882
  927
  974
  1,024
  1,076
  1,130
  1,187
  1,247
  1,310
Total debt, $m
  1,083
  1,181
  1,297
  1,417
  1,542
  1,673
  1,810
  1,953
  2,102
  2,258
  2,422
  2,593
  2,772
  2,959
  3,155
  3,360
  3,575
  3,801
  4,037
  4,285
  4,545
  4,817
  5,103
  5,402
  5,716
  6,046
  6,392
  6,755
  7,136
  7,535
  7,954
Total liabilities, $m
  1,857
  1,954
  2,070
  2,190
  2,315
  2,446
  2,583
  2,726
  2,875
  3,031
  3,195
  3,366
  3,545
  3,732
  3,928
  4,133
  4,348
  4,574
  4,810
  5,058
  5,318
  5,590
  5,876
  6,175
  6,489
  6,819
  7,165
  7,528
  7,909
  8,308
  8,727
Total equity, $m
  1,007
  878
  930
  984
  1,040
  1,099
  1,161
  1,225
  1,292
  1,362
  1,435
  1,512
  1,592
  1,677
  1,765
  1,857
  1,954
  2,055
  2,161
  2,272
  2,389
  2,511
  2,640
  2,774
  2,916
  3,064
  3,219
  3,382
  3,553
  3,733
  3,921
Total liabilities and equity, $m
  2,864
  2,832
  3,000
  3,174
  3,355
  3,545
  3,744
  3,951
  4,167
  4,393
  4,630
  4,878
  5,137
  5,409
  5,693
  5,990
  6,302
  6,629
  6,971
  7,330
  7,707
  8,101
  8,516
  8,949
  9,405
  9,883
  10,384
  10,910
  11,462
  12,041
  12,648
Debt-to-equity ratio
  1.075
  1.350
  1.390
  1.440
  1.480
  1.520
  1.560
  1.590
  1.630
  1.660
  1.690
  1.710
  1.740
  1.760
  1.790
  1.810
  1.830
  1.850
  1.870
  1.890
  1.900
  1.920
  1.930
  1.950
  1.960
  1.970
  1.990
  2.000
  2.010
  2.020
  2.030
Adjusted equity ratio
  0.308
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  133
  103
  111
  119
  128
  136
  146
  155
  165
  176
  187
  255
  267
  280
  293
  307
  321
  337
  352
  369
  387
  405
  424
  444
  466
  488
  511
  536
  561
  588
  617
Depreciation, amort., depletion, $m
  92
  138
  142
  146
  150
  154
  158
  162
  167
  172
  177
  104
  110
  116
  122
  128
  135
  142
  149
  157
  165
  173
  182
  191
  201
  211
  222
  233
  245
  258
  271
Funds from operations, $m
  198
  242
  253
  265
  277
  290
  304
  318
  332
  348
  364
  359
  377
  395
  415
  435
  456
  478
  502
  526
  551
  578
  606
  636
  667
  699
  733
  769
  806
  846
  887
Change in working capital, $m
  -27
  17
  17
  18
  19
  20
  21
  21
  22
  23
  25
  26
  27
  28
  29
  31
  32
  34
  35
  37
  39
  41
  43
  45
  47
  49
  52
  54
  57
  60
  63
Cash from operations, $m
  225
  225
  236
  247
  258
  270
  283
  296
  310
  324
  339
  334
  350
  367
  385
  404
  424
  444
  466
  489
  512
  537
  564
  591
  620
  650
  681
  715
  749
  786
  824
Maintenance CAPEX, $m
  0
  -57
  -61
  -64
  -68
  -72
  -76
  -80
  -84
  -89
  -94
  -99
  -104
  -110
  -116
  -122
  -128
  -135
  -142
  -149
  -157
  -165
  -173
  -182
  -191
  -201
  -211
  -222
  -233
  -245
  -258
New CAPEX, $m
  -62
  -77
  -80
  -84
  -87
  -91
  -95
  -100
  -104
  -109
  -114
  -119
  -125
  -131
  -137
  -143
  -150
  -157
  -165
  -173
  -181
  -190
  -199
  -209
  -219
  -230
  -241
  -253
  -266
  -279
  -292
Cash from investing activities, $m
  -62
  -134
  -141
  -148
  -155
  -163
  -171
  -180
  -188
  -198
  -208
  -218
  -229
  -241
  -253
  -265
  -278
  -292
  -307
  -322
  -338
  -355
  -372
  -391
  -410
  -431
  -452
  -475
  -499
  -524
  -550
Free cash flow, $m
  163
  91
  95
  99
  103
  107
  112
  116
  121
  126
  131
  116
  121
  127
  133
  139
  146
  152
  159
  167
  175
  183
  191
  200
  209
  219
  229
  239
  250
  262
  274
Issuance/(repayment) of debt, $m
  -186
  111
  115
  120
  125
  131
  137
  143
  149
  156
  163
  171
  179
  187
  196
  205
  215
  225
  236
  248
  260
  272
  286
  300
  314
  330
  346
  363
  381
  400
  419
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  
  -188
  111
  115
  120
  125
  131
  137
  143
  149
  156
  163
  171
  179
  187
  196
  205
  215
  225
  236
  248
  260
  272
  286
  300
  314
  330
  346
  363
  381
  400
  419
Total cash flow (excl. dividends), $m
  -34
  202
  210
  219
  228
  238
  249
  259
  271
  282
  295
  286
  300
  314
  329
  344
  361
  378
  396
  415
  434
  455
  477
  499
  523
  548
  575
  602
  631
  662
  694
Retained Cash Flow (-), $m
  -96
  -49
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -77
  -80
  -84
  -88
  -92
  -97
  -101
  -106
  -111
  -117
  -122
  -128
  -135
  -141
  -148
  -155
  -163
  -171
  -180
  -188
Prev. year cash balance distribution, $m
 
  178
  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
 
  331
  158
  165
  172
  179
  187
  195
  203
  212
  221
  210
  220
  230
  241
  252
  264
  277
  290
  303
  318
  333
  348
  365
  382
  400
  419
  439
  460
  482
  505
Discount rate, %
 
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
 
  310
  138
  133
  127
  121
  114
  106
  98
  90
  81
  66
  59
  51
  44
  38
  32
  26
  21
  17
  13
  10
  8
  6
  4
  3
  2
  1
  1
  1
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Minerals Technologies Inc. is a resource- and technology-based company that develops, produces and markets a range of specialty mineral, mineral-based and synthetic mineral products and related systems and services around the world. It operates through four segments. The Specialty Minerals segment produces and sells the synthetic mineral product precipitated calcium carbonate (PCC), mines mineral ores, and processes and sells natural mineral products, primarily limestone and talc. The Performance Materials segment is a supplier of bentonite and bentonite-related products to industrial and consumer markets globally. The Refractories segment produces and markets monolithic and shaped refractory materials and specialty products, services and application and measurement equipment. The Energy Services segment offers a range of services to improve the production, costs, compliance and environmental impact of activities performed in the oil and gas industry.

FINANCIAL RATIOS  of  Minerals Technologies (MTX)

Valuation Ratios
P/E Ratio 18.8
Price to Sales 1.5
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 11.1
Price to Free Cash Flow 15.3
Growth Rates
Sales Growth Rate -8.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -27.9%
Cap. Spend. - 3 Yr. Gr. Rate 7.1%
Financial Strength
Quick Ratio 15
Current Ratio 0
LT Debt to Equity 106.3%
Total Debt to Equity 107.5%
Interest Coverage 4
Management Effectiveness
Return On Assets 6.1%
Ret/ On Assets - 3 Yr. Avg. 5.1%
Return On Total Capital 6.2%
Ret/ On T. Cap. - 3 Yr. Avg. 5.6%
Return On Equity 13.9%
Return On Equity - 3 Yr. Avg. 12.3%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 28.1%
Gross Margin - 3 Yr. Avg. 26.5%
EBITDA Margin 19.5%
EBITDA Margin - 3 Yr. Avg. 15.6%
Operating Margin 13.5%
Oper. Margin - 3 Yr. Avg. 11.3%
Pre-Tax Margin 10.4%
Pre-Tax Margin - 3 Yr. Avg. 8.3%
Net Profit Margin 8.1%
Net Profit Margin - 3 Yr. Avg. 6.5%
Effective Tax Rate 20.6%
Eff/ Tax Rate - 3 Yr. Avg. 21%
Payout Ratio 5.3%

MTX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MTX stock intrinsic value calculation we used $1638 million for the last fiscal year's total revenue generated by Minerals Technologies. The default revenue input number comes from 2016 income statement of Minerals Technologies. 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 MTX stock valuation model: a) initial revenue growth rate of 6% 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 6.8%, whose default value for MTX is calculated based on our internal credit rating of Minerals Technologies, 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 Minerals Technologies.
    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 MTX stock the variable cost ratio is equal to 89.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for MTX 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 4.9% for Minerals Technologies.

Corporate tax rate of 27% is the nominal tax rate for Minerals Technologies. 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 MTX 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 MTX are equal to 78.5%.

Life of production assets of 22.5 years is the average useful life of capital assets used in Minerals Technologies 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 MTX is equal to 16.9%. 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 - $1007 million for Minerals Technologies - 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 35.585 million for Minerals Technologies 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 Minerals Technologies at the current share price and the inputted number of shares is $2.5 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ Minerals Technologies posts 4Q profit   [Feb-01-18 06:05PM  Associated Press]
▶ Minerals Technologies Inc. Declares Quarterly Dividend   [Jan-24-18 08:23AM  GlobeNewswire]
▶ Minerals Technologies Inc. Declares Quarterly Dividend   [Nov-15-17 08:06AM  GlobeNewswire]
▶ Minerals Technologies beats 3Q profit forecasts   [Nov-06-17 05:39AM  Associated Press]
▶ Minerals Technologies misses 2Q profit forecasts   [Aug-05-17 01:12AM  Associated Press]
▶ Minerals Technologies Inc. Declares Quarterly Dividend   [Jul-19-17 08:18AM  GlobeNewswire]
▶ Minerals Technologies Inc. Declares Quarterly Dividend   [May-16-17 08:56AM  GlobeNewswire]
▶ Minerals Technologies beats 1Q profit forecasts   [May-04-17 07:33PM  Associated Press]
▶ Minerals Technologies beats 4Q profit forecasts   [Feb-02-17 06:14PM  Associated Press]
▶ Is Synaptics, Incorporated (SYNA) A Good Stock To Buy?   [Dec-13-16 10:15AM  at Insider Monkey]
▶ Do Hedge Funds Love Minerals Technologies Inc (MTX)?   [Dec-02-16 01:22PM  at Insider Monkey]
Financial statements of MTX
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