ASX:MGX

Stock Analysis Report

Executive Summary

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

Snowflake

Excellent balance sheet with proven track record.


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Fortescue Metals Group

ASX:FMG

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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.5%

MGX

-0.06%

AU Metals and Mining

-0.1%

AU Market


1 Year Return

42.5%

MGX

15.6%

AU Metals and Mining

16.5%

AU Market

Return vs Industry: MGX exceeded the Australian Metals and Mining industry which returned 15.6% over the past year.

Return vs Market: MGX exceeded the Australian Market which returned 16.5% over the past year.


Shareholder returns

MGXIndustryMarket
7 Day2.5%-0.06%-0.1%
30 Day14.2%4.5%1.5%
90 Day12.6%0.4%3.5%
1 Year50.9%42.5%24.1%15.6%23.2%16.5%
3 Year180.9%136.8%61.8%39.6%41.1%21.9%
5 Year133.0%96.3%80.8%37.6%55.2%20.6%

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?

6.73x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MGX (A$0.81) is trading above our estimate of fair value (A$0.27)

Significantly Below Fair Value: MGX is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MGX is good value based on its PE Ratio (6.7x) compared to the Metals and Mining industry average (12.3x).

PE vs Market: MGX is good value based on its PE Ratio (6.7x) compared to the Australian market (18.7x).


Price to Earnings Growth Ratio

PEG Ratio: MGX's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: MGX is overvalued based on its PB Ratio (1.5x) compared to the AU Metals and Mining industry average (1.4x).


Next Steps

Future Growth

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

-14.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MGX's earnings are forecast to decline over the next 3 years (-14% per year).

Earnings vs Market: MGX's earnings are forecast to decline over the next 3 years (-14% per year).

High Growth Earnings: MGX's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MGX's revenue (13.2% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: MGX's revenue (13.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MGX's Return on Equity is forecast to be low in 3 years time (14.7%).


Next Steps

Past Performance

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

61.0%

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 (47.9%) are higher than last year (39%).


Past Earnings Growth Analysis

Earnings Trend: MGX has become profitable over the past 5 years, growing earnings by 61% per year.

Accelerating Growth: MGX's earnings growth over the past year (34.5%) is below its 5-year average (61% per year).

Earnings vs Industry: MGX earnings growth over the past year (34.5%) exceeded the Metals and Mining industry 7.8%.


Return on Equity

High ROE: MGX's Return on Equity (21.7%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Mount Gibson Iron's financial position?


Financial Position Analysis

Short Term Liabilities: MGX's short term assets (A$447.7M) exceeds its short term liabilities (A$73.1M)

Long Term Liabilities: MGX's short term assets (A$447.7M) exceeds its long term liabilities (43.3M)


Debt to Equity History and Analysis

Debt Level: MGX's debt to equity ratio (0.3%) is considered satisfactory.

Reducing Debt: MGX's debt to equity ratio has increased from 0% to 0.3% over the past 5 years.

Debt Coverage: MGX's debt is well covered by operating cash flow (3387.6%).

Interest Coverage: MGX earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: MGX has a high level of physical assets or inventory.

Debt Coverage by Assets: MGX's debt is covered by short term assets (assets are 255.4x debt).


Next Steps

Dividend

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

4.97%

Current Dividend Yield


Dividend Yield vs Market

company5.0%marketbottom25%2.4%markettop25%5.6%industryaverage4.7%forecastin3Years2.9%

Current dividend yield vs market & industry

Notable Dividend: MGX's dividend (4.97%) is higher than the bottom 25% of dividend payers in the Australian market (2.37%).

High Dividend: MGX's dividend (4.97%) is low compared to the top 25% of dividend payers in the Australian market (5.62%).


Stability and Growth of Payments

Stable Dividend: MGX has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: MGX has only been paying a dividend for 8 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (33.4%), 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 (19.2% payout ratio).


Next Steps

Management

What is the CEO of Mount Gibson Iron's salary, the management and board of directors tenure and is there insider trading?

1.1yrs

Average management tenure


CEO

Peter Kerr 0

1.1yrs

Tenure

AU$1,150,877

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 ($USD784.83K) is about average for companies of similar size in the Australian market ($USD987.60K).

Compensation vs Earnings: Peter's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.1yrs

Average Tenure

Experienced Management: MGX's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Age and Tenure

7.8yrs

Average Tenure

51yo

Average Age

Experienced Board: MGX's board of directors are considered experienced (7.8 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyAU$1,120,25506 Nov 19
APAC Resources Limited
EntityCompany
Shares1,470,355
Max PriceAU$0.77
BuyAU$174,37316 Oct 19
APAC Resources Limited
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Shares241,782
Max PriceAU$0.72
BuyAU$892,58710 Oct 19
APAC Resources Limited
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Shares1,225,434
Max PriceAU$0.74
BuyAU$278,94603 Oct 19
APAC Resources Limited
EntityCompany
Shares372,489
Max PriceAU$0.76
BuyAU$298,83727 Sep 19
APAC Resources Limited
EntityCompany
Shares401,975
Max PriceAU$0.75
BuyAU$408,44624 Sep 19
APAC Resources Limited
EntityCompany
Shares550,555
Max PriceAU$0.75
BuyAU$712,22817 Sep 19
APAC Resources Limited
EntityCompany
Shares955,840
Max PriceAU$0.75
BuyAU$1,264,09711 Sep 19
APAC Resources Limited
EntityCompany
Shares1,726,399
Max PriceAU$0.74
BuyAU$753,76506 Sep 19
APAC Resources Limited
EntityCompany
Shares1,060,000
Max PriceAU$0.71
BuyAU$119,30105 Sep 19
APAC Resources Limited
EntityCompany
Shares178,595
Max PriceAU$0.67
SellAU$116,67016 Apr 19
Alan Jones
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares100,000
Max PriceAU$1.17
BuyAU$12,67906 Dec 18
Simon Bird
EntityIndividual
Role
Lead Director
Lead Independent Non-Executive Director
Shares24,000
Max PriceAU$0.53

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Peter Kerr

    Chief Executive Officer

    • Tenure: 1.1yrs
    • Compensation: AU$1.15m
  • David Stokes

    Company Secretary & General Counsel

    • Tenure: 7.6yrs
    • Compensation: AU$744.93k
  • J. Fitzgerald

    Group Financial Controller

    • Tenure: 0yrs
  • Gillian Dobson

    Chief Financial Officer

    • Tenure: 1.1yrs
    • Compensation: AU$515.30k
  • Mark Mitchell

    Chief Operating Officer

    • Tenure: 0.8yrs

Board Members

  • Russell Barwick

    Independent Non-Executive Director

    • Tenure: 8yrs
    • Compensation: AU$103.50k
  • Simon Bird

    Lead Independent Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: AU$111.00k
  • Shaofeng Li (52yo)

    Non-Executive Director

    • Tenure: 7.8yrs
  • Seng-Hui Lee (50yo)

    Non-Executive Chairman

    • Tenure: 5.8yrs
    • Compensation: AU$104.63k
  • Alan Jones (76yo)

    Independent Non-Executive Director

    • Tenure: 13.3yrs
    • Compensation: AU$103.50k
  • Andrew Ferguson (46yo)

    Alternate Director

    • Tenure: 7.2yrs
  • Paul Dougas

    Independent Non-Executive Director

    • Tenure: 8yrs
    • Compensation: AU$90.50k

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$931.934m
  • Shares outstanding: 1.16b
  • 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

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MGXASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 2002
FWQDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 2002
MTGR.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 2002
MGXCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 2002
MTGR.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDJan 2012

Biography

Mount Gibson Iron Limited, together with its subsidiaries, engages in mining and processing of hematite iron ore deposits in Australia. The company primarily operates the Extension Hill mine site in the Mi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/19 10:32
End of Day Share Price2019/11/19 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


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.