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Methanex Corporation (TSE:MX): Commentary On Fundamentals

Simply Wall St

I've been keeping an eye on Methanex Corporation (TSE:MX) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe MX has a lot to offer. Basically, it is a well-regarded dividend payer with an impressive history of performance, trading at a great value. Below is a brief commentary on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on Methanex here.

Established dividend payer and good value

MX has a strong track record of performance. In the previous year, MX delivered an impressive double-digit return of 24%. Not surprisingly, MX outperformed its industry which returned 6.8%, giving us more conviction of the company's capacity to drive bottom-line growth going forward. MX's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of MX's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the chemicals industry, MX is also trading below its peers, relative to earnings generated. This supports the theory that MX is potentially underpriced.

TSX:MX Income Statement, August 12th 2019
TSX:MX Income Statement, August 12th 2019

MX is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.

TSX:MX Historical Dividend Yield, August 12th 2019
TSX:MX Historical Dividend Yield, August 12th 2019

Next Steps:

For Methanex, there are three fundamental factors you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for MX’s future growth? Take a look at our free research report of analyst consensus for MX’s outlook.

  2. Financial Health: Are MX’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MX? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.