ASX:MGX

Stock Analysis Report

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Market Cap

AU$1.0b

Last Updated

2021/07/31 08:12 UTC

Data Sources

Company Financials +

Executive Summary

Mount Gibson Iron Limited, together with its subsidiaries, engages in mining and processing of hematite iron ore in Australia. More Details


Snowflake Analysis

Flawless balance sheet and undervalued.


Similar Companies

Share Price & News

How has Mount Gibson Iron's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MGX is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: MGX's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

-8.0%

MGX

2.7%

AU Metals and Mining

0.01%

AU Market


1 Year Return

21.1%

MGX

37.6%

AU Metals and Mining

27.8%

AU Market

Return vs Industry: MGX underperformed the Australian Metals and Mining industry which returned 37.6% over the past year.

Return vs Market: MGX underperformed the Australian Market which returned 27.8% over the past year.


Shareholder returns

MGXIndustryMarket
7 Day-8.0%2.7%0.01%
30 Day-7.0%8.2%1.8%
90 Day-7.0%9.6%4.7%
1 Year25.9%21.1%44.7%37.6%32.6%27.8%
3 Year134.1%100.0%91.6%64.2%34.4%18.1%
5 Year265.9%196.6%170.7%121.6%66.2%33.9%

Long-Term Price Volatility Vs. Market

How volatile is Mount Gibson Iron's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Mount Gibson Iron undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MGX (A$0.86) is trading below our estimate of fair value (A$6.7)

Significantly Below Fair Value: MGX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MGX is good value based on its PE Ratio (8.7x) compared to the Australian Metals and Mining industry average (12.4x).

PE vs Market: MGX is good value based on its PE Ratio (8.7x) compared to the Australian market (20.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MGX's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MGX is good value based on its PB Ratio (1.4x) compared to the AU Metals and Mining industry average (2.6x).


Future Growth

How is Mount Gibson Iron forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

33.6%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if MGX's forecast earnings growth is above the savings rate (1.9%).

Earnings vs Market: Insufficient data to determine if MGX's earnings are forecast to grow faster than the Australian market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MGX's revenue (33.6% per year) is forecast to grow faster than the Australian market (4.9% per year).

High Growth Revenue: MGX's revenue (33.6% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MGX's Return on Equity is forecast to be high in 3 years time (35.7%)


Past Performance

How has Mount Gibson Iron performed over the past 5 years?

22.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MGX has a high level of non-cash earnings.

Growing Profit Margin: MGX's current net profit margins (25.4%) are lower than last year (37.3%).


Past Earnings Growth Analysis

Earnings Trend: MGX has become profitable over the past 5 years, growing earnings by 22.4% per year.

Accelerating Growth: MGX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: MGX had negative earnings growth (-13.8%) over the past year, making it difficult to compare to the Metals and Mining industry average (22.9%).


Return on Equity

High ROE: MGX's Return on Equity (15.7%) is considered low.


Financial Health

How is Mount Gibson Iron's financial position?


Financial Position Analysis

Short Term Liabilities: MGX's short term assets (A$507.5M) exceed its short term liabilities (A$80.6M).

Long Term Liabilities: MGX's short term assets (A$507.5M) exceed its long term liabilities (A$55.9M).


Debt to Equity History and Analysis

Debt Level: MGX is debt free.

Reducing Debt: MGX has no debt compared to 5 years ago when its debt to equity ratio was 0.6%.

Debt Coverage: MGX has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: MGX has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is Mount Gibson Iron current dividend yield, its reliability and sustainability?

3.49%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MGX's dividend (3.49%) is higher than the bottom 25% of dividend payers in the Australian market (1.99%).

High Dividend: MGX's dividend (3.49%) is low compared to the top 25% of dividend payers in the Australian market (4.98%).


Stability and Growth of Payments

Stable Dividend: MGX's dividend payments have been volatile in the past 10 years.

Growing Dividend: MGX's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.4%), MGX's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MGX's dividends in 3 years are forecast to be well covered by earnings (23.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Peter Kerr

2.75yrs

Tenure

AU$991,648

Compensation

Mr. Peter W. Kerr, B.Comm, CA, F.Fin, M.AusIMM, M.AICD., has been the Chief Executive Officer at Mount Gibson Iron Limited since October 1, 2018. He served as the Chief Financial Officer of Mount Gibson Ir...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD728.51K) is about average for companies of similar size in the Australian market ($USD894.99K).

Compensation vs Earnings: Peter's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: MGX's management team is considered experienced (2.8 years average tenure).


Board Members

Experienced Board: MGX's board of directors are considered experienced (8.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.4%.


Top Shareholders

Company Information

Mount Gibson Iron Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Mount Gibson Iron Limited
  • Ticker: MGX
  • Exchange: ASX
  • Founded: 1996
  • Industry: Steel
  • Sector: Materials
  • Market Cap: AU$1.022b
  • Shares outstanding: 1.19b
  • Website: https://www.mtgibsoniron.com.au

Number of Employees


Location

  • Mount Gibson Iron Limited
  • 2 Kings Park Road
  • Level 1
  • West Perth
  • Western Australia
  • 6005
  • Australia

Listings


Biography

Mount Gibson Iron Limited, together with its subsidiaries, engages in mining and processing of hematite iron ore in Australia. It operates in two segments, Extension Hill and Koolan Island. The company pri...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/07/31 08:12
End of Day Share Price2021/07/30 00:00
Earnings2020/12/31
Annual Earnings2020/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.