Intrinsic value of Myers Industries - MYE

Previous Close

$24.70

  Intrinsic Value

$6.65

stock screener

  Rating & Target

str. sell

-73%

Previous close

$24.70

 
Intrinsic value

$6.65

 
Up/down potential

-73%

 
Rating

str. 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

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 0.9

 

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, %
  3.90
  4.01
  4.11
  4.20
  4.28
  4.35
  4.42
  4.47
  4.53
  4.57
  4.62
  4.65
  4.69
  4.72
  4.75
  4.77
  4.80
  4.82
  4.83
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
Revenue, $m
  568
  591
  615
  641
  669
  698
  729
  761
  796
  832
  871
  911
  954
  999
  1,046
  1,096
  1,149
  1,204
  1,262
  1,323
  1,388
  1,456
  1,527
  1,602
  1,680
  1,763
  1,850
  1,941
  2,037
  2,138
Variable operating expenses, $m
  539
  560
  583
  607
  632
  660
  688
  719
  751
  784
  810
  848
  888
  930
  974
  1,020
  1,069
  1,121
  1,175
  1,232
  1,292
  1,355
  1,421
  1,491
  1,564
  1,641
  1,722
  1,807
  1,896
  1,990
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
  539
  560
  583
  607
  632
  660
  688
  719
  751
  784
  810
  848
  888
  930
  974
  1,020
  1,069
  1,121
  1,175
  1,232
  1,292
  1,355
  1,421
  1,491
  1,564
  1,641
  1,722
  1,807
  1,896
  1,990
Operating income, $m
  29
  31
  33
  34
  36
  38
  40
  43
  45
  48
  60
  63
  66
  69
  72
  76
  79
  83
  87
  91
  96
  101
  106
  111
  116
  122
  128
  134
  141
  148
EBITDA, $m
  61
  64
  66
  69
  72
  75
  79
  82
  86
  90
  94
  98
  103
  108
  113
  118
  124
  130
  136
  143
  150
  157
  165
  173
  181
  190
  200
  210
  220
  231
Interest expense (income), $m
  9
  8
  9
  9
  10
  11
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
  27
  28
  30
  32
  34
  35
  38
  40
  42
  44
  47
Earnings before tax, $m
  21
  22
  23
  24
  26
  27
  28
  30
  31
  33
  45
  46
  48
  50
  52
  55
  57
  59
  62
  65
  68
  71
  74
  77
  81
  84
  88
  92
  97
  101
Tax expense, $m
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
Net income, $m
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  33
  34
  35
  37
  38
  40
  42
  43
  45
  47
  49
  52
  54
  56
  59
  62
  64
  67
  70
  74

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
  370
  385
  400
  417
  435
  454
  474
  495
  518
  541
  566
  593
  621
  650
  681
  713
  747
  783
  821
  861
  903
  947
  993
  1,042
  1,093
  1,147
  1,204
  1,263
  1,325
  1,391
Adjusted assets (=assets-cash), $m
  370
  385
  400
  417
  435
  454
  474
  495
  518
  541
  566
  593
  621
  650
  681
  713
  747
  783
  821
  861
  903
  947
  993
  1,042
  1,093
  1,147
  1,204
  1,263
  1,325
  1,391
Revenue / Adjusted assets
  1.535
  1.535
  1.538
  1.537
  1.538
  1.537
  1.538
  1.537
  1.537
  1.538
  1.539
  1.536
  1.536
  1.537
  1.536
  1.537
  1.538
  1.538
  1.537
  1.537
  1.537
  1.537
  1.538
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
  1.537
Average production assets, $m
  152
  158
  165
  172
  179
  187
  195
  204
  213
  223
  233
  244
  256
  268
  280
  294
  308
  323
  338
  355
  372
  390
  409
  429
  450
  472
  496
  520
  546
  573
Working capital, $m
  41
  43
  45
  47
  49
  51
  53
  56
  58
  61
  64
  67
  70
  73
  76
  80
  84
  88
  92
  97
  101
  106
  111
  117
  123
  129
  135
  142
  149
  156
Total debt, $m
  161
  172
  184
  196
  210
  223
  238
  254
  270
  288
  306
  326
  346
  368
  390
  414
  440
  466
  494
  523
  554
  587
  621
  657
  695
  734
  776
  820
  866
  914
Total liabilities, $m
  273
  283
  295
  308
  321
  335
  349
  365
  382
  399
  417
  437
  457
  479
  502
  526
  551
  577
  605
  635
  665
  698
  732
  768
  806
  845
  887
  931
  977
  1,025
Total equity, $m
  97
  101
  105
  110
  114
  119
  125
  130
  136
  142
  149
  156
  163
  171
  179
  188
  197
  206
  216
  226
  237
  249
  261
  274
  288
  302
  317
  332
  349
  366
Total liabilities and equity, $m
  370
  384
  400
  418
  435
  454
  474
  495
  518
  541
  566
  593
  620
  650
  681
  714
  748
  783
  821
  861
  902
  947
  993
  1,042
  1,094
  1,147
  1,204
  1,263
  1,326
  1,391
Debt-to-equity ratio
  1.660
  1.700
  1.750
  1.790
  1.830
  1.870
  1.910
  1.950
  1.990
  2.020
  2.060
  2.090
  2.120
  2.150
  2.180
  2.210
  2.240
  2.260
  2.290
  2.310
  2.330
  2.360
  2.380
  2.400
  2.420
  2.430
  2.450
  2.470
  2.480
  2.500
Adjusted equity ratio
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263
  0.263

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  33
  34
  35
  37
  38
  40
  42
  43
  45
  47
  49
  52
  54
  56
  59
  62
  64
  67
  70
  74
Depreciation, amort., depletion, $m
  32
  33
  34
  35
  36
  37
  38
  39
  41
  42
  34
  35
  37
  39
  41
  43
  45
  47
  49
  51
  54
  57
  59
  62
  65
  68
  72
  75
  79
  83
Funds from operations, $m
  47
  49
  51
  53
  55
  57
  59
  61
  64
  66
  66
  69
  72
  76
  79
  82
  86
  90
  94
  99
  103
  108
  113
  119
  124
  130
  136
  143
  150
  157
Change in working capital, $m
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
Cash from operations, $m
  46
  47
  49
  51
  53
  55
  57
  59
  61
  64
  64
  66
  69
  72
  75
  79
  82
  86
  90
  94
  99
  103
  108
  113
  118
  124
  130
  136
  143
  149
Maintenance CAPEX, $m
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -54
  -57
  -59
  -62
  -65
  -68
  -72
  -75
  -79
New CAPEX, $m
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
Cash from investing activities, $m
  -27
  -28
  -30
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -42
  -45
  -46
  -49
  -52
  -54
  -57
  -60
  -63
  -65
  -68
  -72
  -76
  -79
  -83
  -87
  -91
  -96
  -101
  -106
Free cash flow, $m
  19
  19
  20
  20
  20
  21
  21
  22
  22
  23
  21
  22
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
  37
  38
  40
  41
  43
Issuance/(repayment) of debt, $m
  10
  11
  12
  12
  13
  14
  15
  16
  17
  17
  18
  19
  20
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
  36
  38
  40
  42
  44
  46
  48
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  10
  11
  12
  12
  13
  14
  15
  16
  17
  17
  18
  19
  20
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
  36
  38
  40
  42
  44
  46
  48
Total cash flow (excl. dividends), $m
  29
  30
  31
  32
  34
  35
  36
  37
  39
  40
  39
  41
  43
  45
  47
  49
  51
  53
  56
  58
  61
  64
  67
  70
  73
  76
  80
  84
  87
  92
Retained Cash Flow (-), $m
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
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
  26
  26
  27
  28
  29
  30
  31
  32
  33
  34
  33
  34
  36
  37
  39
  40
  42
  44
  46
  48
  50
  52
  54
  57
  59
  62
  65
  68
  71
  74
Discount rate, %
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
  24
  23
  21
  20
  19
  17
  16
  15
  13
  12
  10
  8
  7
  6
  5
  4
  3
  3
  2
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  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

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 741.5
Price to Sales 1.3
Price to Book 8
Price to Tangible Book
Price to Cash Flow 21.8
Price to Free Cash Flow 35.3
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 $547.043 million for the last fiscal year's total revenue generated by Myers Industries. The default revenue input number comes from 0001 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 3.9% 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 7.3%, 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 94.9%.

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 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 5.4% 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 26.8%.

Life of production assets of 6.9 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 7.3%. 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 - $93.752 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 35.204 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 $0.9 billion.

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COMPANY NEWS

▶ Myers Industries Announces Quarterly Dividend   [Aug-06-18 09:15AM  Business Wire]
▶ Myers Industries Announces Quarterly Dividend   [Jun-04-18 04:15PM  Business Wire]
▶ Myers Industries, Inc. to Host Earnings Call   [May-07-18 08:00AM  ACCESSWIRE]
▶ Myers: 1Q Earnings Snapshot   [07:38AM  Associated Press]
▶ Myers Industries Announces Quarterly Dividend   [Mar-09-18 08:30AM  Business Wire]
▶ Myers Industries, Inc. to Host Earnings Call   [Mar-06-18 08:00AM  ACCESSWIRE]
▶ Myers reports 4Q loss   [07:51AM  Associated Press]
▶ You Should Diversify With These Materials Dividend Stocks   [Mar-04-18 01:02PM  Simply Wall St.]
▶ 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]

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