TSX:MAL

Stock Analysis Report

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Executive Summary

Magellan Aerospace Corporation, through its subsidiaries, designs, engineers, and manufactures aero engine, and aero structure assemblies and components for aerospace markets in Canada, the United States, Europe, and Asia.


Snowflake Analysis

Flawless balance sheet and undervalued.


Similar Companies

Share Price & News

How has Magellan Aerospace's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MAL's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.7%

MAL

-2.7%

CA Aerospace & Defense

2.4%

CA Market


1 Year Return

-56.6%

MAL

-43.2%

CA Aerospace & Defense

-12.4%

CA Market

Return vs Industry: MAL underperformed the Canadian Aerospace & Defense industry which returned -43.5% over the past year.

Return vs Market: MAL underperformed the Canadian Market which returned -12.5% over the past year.


Shareholder returns

MALIndustryMarket
7 Day0.7%-2.7%2.4%
30 Day-13.3%-9.8%-1.0%
90 Day31.9%30.9%17.4%
1 Year-54.5%-56.6%-42.5%-43.2%-9.4%-12.4%
3 Year-60.8%-64.1%-12.0%-15.7%4.2%-5.7%
5 Year-51.2%-56.4%28.1%18.9%22.1%3.8%

Price Volatility Vs. Market

How volatile is Magellan Aerospace's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Magellan Aerospace 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: MAL (CA$7.2) is trading below our estimate of fair value (CA$21.23)

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


Price To Earnings Ratio

PE vs Industry: MAL is good value based on its PE Ratio (6.3x) compared to the Aerospace & Defense industry average (15.9x).

PE vs Market: MAL is good value based on its PE Ratio (6.3x) compared to the Canadian market (13.4x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: MAL is good value based on its PB Ratio (0.5x) compared to the CA Aerospace & Defense industry average (2.2x).


Next Steps

Future Growth

How is Magellan Aerospace forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

-1.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MAL's earnings are forecast to decline over the next 3 years (-1.5% per year).

Earnings vs Market: MAL's earnings are forecast to decline over the next 3 years (-1.5% per year).

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

Revenue vs Market: MAL's revenue is expected to decline over the next 3 years (-0.1% per year).

High Growth Revenue: MAL's revenue is forecast to decline over the next 3 years (-0.1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MAL's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Magellan Aerospace performed over the past 5 years?

1.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MAL has high quality earnings.

Growing Profit Margin: MAL's current net profit margins (6.8%) are lower than last year (9.3%).


Past Earnings Growth Analysis

Earnings Trend: MAL's earnings have grown by 1.7% per year over the past 5 years.

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

Earnings vs Industry: MAL had negative earnings growth (-27.2%) over the past year, making it difficult to compare to the Aerospace & Defense industry average (0.4%).


Return on Equity

High ROE: MAL's Return on Equity (7.8%) is considered low.


Next Steps

Financial Health

How is Magellan Aerospace's financial position?


Financial Position Analysis

Short Term Liabilities: MAL's short term assets (CA$579.9M) exceed its short term liabilities (CA$200.7M).

Long Term Liabilities: MAL's short term assets (CA$579.9M) exceed its long term liabilities (CA$134.1M).


Debt to Equity History and Analysis

Debt Level: MAL's debt to equity ratio (8.3%) is considered satisfactory.

Reducing Debt: MAL's debt to equity ratio has reduced from 39.5% to 8.3% over the past 5 years.

Debt Coverage: MAL's debt is well covered by operating cash flow (108.5%).

Interest Coverage: MAL's interest payments on its debt are well covered by EBIT (18.5x coverage).


Balance Sheet


Next Steps

Dividend

What is Magellan Aerospace current dividend yield, its reliability and sustainability?

5.83%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MAL's dividend (5.83%) is higher than the bottom 25% of dividend payers in the Canadian market (1.91%).

High Dividend: MAL's dividend (5.83%) is low compared to the top 25% of dividend payers in the Canadian market (6.04%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, MAL has been paying a dividend for less than 10 years.

Growing Dividend: MAL's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (35.6%), MAL's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MAL's dividends in 3 years are forecast to be covered by earnings (51.8% payout ratio).


Next Steps

Management

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

3.3yrs

Average management tenure


CEO

Phil Underwood

5.5yrs

Tenure

CA$680,250

Compensation

Mr. Phillip Campion Underwood, also known as Phil, has been the President of Magellan Aerospace Corp. since May 13, 2014 and has been its Chief Executive Officer since January 1, 2015. Mr. Underwood served ...


CEO Compensation Analysis

Compensation vs Market: Phil's total compensation ($USD501.17K) is below average for companies of similar size in the Canadian market ($USD1.12M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Norman Edwards
Executive Chairmanno datano data73.97% CA$312.2m
Phillip Underwood
President5.5yrsCA$680.25k0.0033% CA$13.8k
Elena Milantoni
Chief Financial Officer4.5yrsCA$312.02kno data
Hyden Martin
Vice President of Business Development2.08yrsCA$341.46kno data
Jo-Ann Ball
Vice President of Human Resourcesno dataCA$253.88kno data
Craig Vaughan
Corporate Secretary2.17yrsno datano data

3.3yrs

Average Tenure

Experienced Management: MAL's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Norman Edwards
Executive Chairmanno datano data73.97% CA$312.2m
Phillip Underwood
President5.5yrsCA$680.25k0.0033% CA$13.8k
William Davis
Independent Director31.5yrsCA$72.00k0.0072% CA$30.4k
Larry G. Moeller
Director25.5yrsCA$72.00k3.86% CA$16.3m
Bruce Gowan
Independent Director30.5yrsCA$95.00k0.016% CA$66.4k
Beth M. Bandler
Independent Director6.17yrsCA$80.00k0.0052% CA$21.7k
Steven Somerville
Independent Director7.17yrsCA$88.00k0.0089% CA$37.7k

16.3yrs

Average Tenure

61yo

Average Age

Experienced Board: MAL's board of directors are seasoned and experienced ( 16.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: MAL insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Magellan Aerospace Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Magellan Aerospace Corporation
  • Ticker: MAL
  • Exchange: TSX
  • Founded: 1994
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: CA$422.015m
  • Shares outstanding: 58.21m
  • Website: https://www.magellan.aero

Number of Employees


Location

  • Magellan Aerospace Corporation
  • 3160 Derry Road East
  • Mississauga
  • Ontario
  • L4T 1A9
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MALTSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1975
4M7ADB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1975
MALJ.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJan 1975

Biography

Magellan Aerospace Corporation, through its subsidiaries, designs, engineers, and manufactures aero engine, and aero structure assemblies and components for aerospace markets in Canada, the United States, Europe, and Asia. The company offers aero engine products, including engine frames, compressor and fan cases, turbine cases, shafts, rotor spools, discs and blisks, and gearbox housings; and combustion liners and cases, exhaust frames and systems, engine bypass ducts and frames, acoustically treated exhaust systems, and fan cowl doors, as well as repair and overhaul services. It also provides aero structure components, such as landing gear systems, wing ribs and spars, bulkheads and fuselage components, tailcone assemblies, and composite wing and fairing structures. In addition, the company offers space, satellites, SCISAT, and satellite subsystems; sand cast components comprising engine mounted gearbox housings, power transmission housings, APU housings, engine inlets and intermediate cases, and front frames and fan cases; and wire strike protection systems for helicopter safety. Further, it provides power generation equipment and services, and gas turbines, as well as generates energy from waste; and rocket weapon systems, brant rockets, booster motors, and missile fins and control systems, as well as other support materials. Additionally, the company is involved in the precision machining and assembly of commercial aerospace products, as well as provision of metal finishing treatment services for aerospace products; supply and overhaul of aircraft and helicopter engines and airborne ancillary power units; and provision of aircraft engineering and design consultancy, including engine sales, exchange, and leasing services. Magellan Aerospace Corporation was founded in 1994 and is headquartered in Mississauga, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/04 00:15
End of Day Share Price2020/07/03 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.