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MRU

Metro TSX:MRU Stock Report

Last Price

CA$70.23

Market Cap

CA$16.8b

7D

0.07%

1Y

9.2%

Updated

09 Aug, 2022

Data

Company Financials +
MRU fundamental analysis
Snowflake Score
Valuation1/6
Future Growth1/6
Past Performance3/6
Financial Health5/6
Dividends4/6

MRU Stock Overview

Metro Inc. operates as a retailer, franchisor, distributor, and manufacturer in the food and pharmaceutical sectors in Canada.

Rewards

Trading at 7.8% below our estimate of its fair value

Earnings are forecast to grow 4.19% per year

Risk Analysis

MRU passed our risk checks.

Metro Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Metro
Historical stock prices
Current Share PriceCA$70.23
52 Week HighCA$73.54
52 Week LowCA$59.14
Beta-0.034
1 Month Change-1.31%
3 Month Change2.90%
1 Year Change9.24%
3 Year Change31.37%
5 Year Change64.71%
Change since IPO27,085.95%

Recent News & Updates

May 29
Metro (TSE:MRU) Seems To Use Debt Quite Sensibly

Metro (TSE:MRU) Seems To Use Debt Quite Sensibly

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

May 14
A Look At The Fair Value Of Metro Inc. (TSE:MRU)

A Look At The Fair Value Of Metro Inc. (TSE:MRU)

In this article we are going to estimate the intrinsic value of Metro Inc. ( TSE:MRU ) by taking the forecast future...

Shareholder Returns

MRUCA Consumer RetailingCA Market
7D0.07%-0.8%-0.4%
1Y9.2%14.2%-1.2%

Return vs Industry: MRU underperformed the Canadian Consumer Retailing industry which returned 14.2% over the past year.

Return vs Market: MRU exceeded the Canadian Market which returned -1.2% over the past year.

Price Volatility

Is MRU's price volatile compared to industry and market?
MRU volatility
MRU Average Weekly Movement2.6%
Consumer Retailing Industry Average Movement4.1%
Market Average Movement10.8%
10% most volatile stocks in CA Market19.3%
10% least volatile stocks in CA Market4.4%

Stable Share Price: MRU is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: MRU's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
194790,000Eric La Flechehttps://www.metro.ca

Metro Inc. operates as a retailer, franchisor, distributor, and manufacturer in the food and pharmaceutical sectors in Canada. It operates supermarkets and discount stores that provide fresh and grocery products, baked goods, prepared foods, meats, dairy products, fruits and vegetables, frozen foods, bakery products, and pastries, as well as Mediterranean and Middle Eastern products. As of September 25, 2021, the company operated a network of approximately 963 food stores under various banners, including Metro, Metro Plus, Super C, and Food Basics, Adonis, and Premiere Moisson as well as approximately 649 drugstores primarily under the Jean Coutu, Brunet, Metro Pharmacy, and Food Basics Pharmacy banners.

Metro Fundamentals Summary

How do Metro's earnings and revenue compare to its market cap?
MRU fundamental statistics
Market CapCA$16.78b
Earnings (TTM)CA$849.30m
Revenue (TTM)CA$18.40b

19.8x

P/E Ratio

0.9x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MRU income statement (TTM)
RevenueCA$18.40b
Cost of RevenueCA$16.22b
Gross ProfitCA$2.19b
Other ExpensesCA$1.34b
EarningsCA$849.30m

Last Reported Earnings

Mar 12, 2022

Next Earnings Date

Aug 10, 2022

Earnings per share (EPS)3.55
Gross Margin11.88%
Net Profit Margin4.61%
Debt/Equity Ratio40.5%

How did MRU perform over the long term?

See historical performance and comparison

Dividends

1.6%

Current Dividend Yield

30%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is MRU undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MRU?

Other financial metrics that can be useful for relative valuation.

MRU key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.1x
Enterprise Value/EBITDA12.3x
PEG Ratio4.7x

Price to Earnings Ratio vs Peers

How does MRU's PE Ratio compare to its peers?

MRU PE Ratio vs Peers
The above table shows the PE ratio for MRU vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average15.5x
WN George Weston
13.1x-3.1%CA$21.7b
EMP.A Empire
13.4xn/aCA$10.0b
L Loblaw Companies
18.8x-2.3%CA$37.7b
ATD Alimentation Couche-Tard
16.5x8.0%CA$57.0b
MRU Metro
19.8x4.2%CA$16.8b

Price-To-Earnings vs Peers: MRU is expensive based on its Price-To-Earnings Ratio (19.8x) compared to the peer average (15.5x).


Price to Earnings Ratio vs Industry

How does MRU's PE Ratio compare vs other companies in the North American Consumer Retailing Industry?

Price-To-Earnings vs Industry: MRU is expensive based on its Price-To-Earnings Ratio (19.8x) compared to the Canadian Consumer Retailing industry average (13.3x)


Price to Earnings Ratio vs Fair Ratio

What is MRU's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MRU PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio19.8x
Fair PE Ratio16.9x

Price-To-Earnings vs Fair Ratio: MRU is expensive based on its Price-To-Earnings Ratio (19.8x) compared to the estimated Fair Price-To-Earnings Ratio (16.9x).


Share Price vs Fair Value

What is the Fair Price of MRU when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MRU (CA$70.23) is trading below our estimate of fair value (CA$76.2)

Significantly Below Fair Value: MRU is trading below fair value, but not by a significant amount.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Metro forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


4.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MRU's forecast earnings growth (4.2% per year) is above the savings rate (1.6%).

Earnings vs Market: MRU's earnings (4.2% per year) are forecast to grow slower than the Canadian market (7.6% per year).

High Growth Earnings: MRU's earnings are forecast to grow, but not significantly.

Revenue vs Market: MRU's revenue (2.5% per year) is forecast to grow slower than the Canadian market (6.3% per year).

High Growth Revenue: MRU's revenue (2.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MRU's Return on Equity is forecast to be low in 3 years time (13.9%).


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Past Performance

How has Metro performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-7.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MRU has high quality earnings.

Growing Profit Margin: MRU's current net profit margins (4.6%) are higher than last year (4.5%).


Past Earnings Growth Analysis

Earnings Trend: MRU's earnings have declined by 7.1% per year over the past 5 years.

Accelerating Growth: MRU's earnings growth over the past year (2.6%) exceeds its 5-year average (-7.1% per year).

Earnings vs Industry: MRU earnings growth over the past year (2.6%) underperformed the Consumer Retailing industry 6.3%.


Return on Equity

High ROE: MRU's Return on Equity (13.1%) is considered low.


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Financial Health

How is Metro's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: MRU's short term assets (CA$2.3B) exceed its short term liabilities (CA$2.1B).

Long Term Liabilities: MRU's short term assets (CA$2.3B) do not cover its long term liabilities (CA$4.9B).


Debt to Equity History and Analysis

Debt Level: MRU's net debt to equity ratio (37.1%) is considered satisfactory.

Reducing Debt: MRU's debt to equity ratio has reduced from 54.2% to 40.5% over the past 5 years.

Debt Coverage: MRU's debt is well covered by operating cash flow (56.8%).

Interest Coverage: MRU's interest payments on its debt are well covered by EBIT (11.2x coverage).


Balance Sheet


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Dividend

What is Metro current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.57%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MRU's dividend (1.57%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.91%).

High Dividend: MRU's dividend (1.57%) is low compared to the top 25% of dividend payers in the Canadian market (5.36%).


Stability and Growth of Payments

Stable Dividend: MRU's dividends per share have been stable in the past 10 years.

Growing Dividend: MRU's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (30%), MRU's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (32.1%), MRU's dividend payments are well covered by cash flows.


Discover strong dividend paying companies

Management

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

3.8yrs

Average management tenure


CEO

Eric La Fleche (60 yo)

14.33yrs

Tenure

CA$5,018,907

Compensation

Mr. Eric Richer La Fleche has been the Chief Executive Officer and President of Metro Inc. since April 1, 2008. Mr. La Fleche served as the Chief Operating Officer and Executive Vice President of Metro fro...


CEO Compensation Analysis

Compensation vs Market: Eric's total compensation ($USD3.90M) is below average for companies of similar size in the Canadian market ($USD7.95M).

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


Leadership Team

Experienced Management: MRU's management team is considered experienced (3.8 years average tenure).


Board Members

Experienced Board: MRU's board of directors are considered experienced (6.6 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: MRU insiders have only sold shares 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

Metro Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Metro Inc.
  • Ticker: MRU
  • Exchange: TSX
  • Founded: 1947
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Implied Market Cap: CA$16.778b
  • Shares outstanding: 238.91m
  • Website: https://www.metro.ca

Number of Employees


Location

  • Metro Inc.
  • 11011 Maurice-Duplessis Boulevard
  • Montreal
  • Quebec
  • H1C 1V6
  • Canada

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/09 00:00
End of Day Share Price2022/08/09 00:00
Earnings2022/03/12
Annual Earnings2021/09/25


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.