TSX:MTY

Stock Analysis Report

Executive Summary

MTY Food Group Inc. operates as a franchisor in the quick service and casual dining food industry in Canada, the United States, and internationally.

Snowflake

Fundamentals

Moderate growth potential and slightly overvalued.

Share Price & News

How has MTY Food Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-5.7%

MTY

-2.2%

CA Hospitality

0.2%

CA Market


1 Year Return

-22.8%

MTY

-5.8%

CA Hospitality

3.5%

CA Market

Return vs Industry: MTY underperformed the Canadian Hospitality industry which returned -5.8% over the past year.

Return vs Market: MTY underperformed the Canadian Market which returned 3.5% over the past year.


Shareholder returns

MTYIndustryMarket
7 Day-5.7%-2.2%0.2%
30 Day-18.1%6.7%-3.3%
90 Day-19.6%3.0%-1.9%
1 Year-22.0%-22.8%-5.1%-5.8%7.3%3.5%
3 Year13.9%10.5%38.4%34.4%14.7%4.4%
5 Year74.8%65.3%2.9%-0.2%26.2%7.7%

Price Volatility Vs. Market

How volatile is MTY Food Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is MTY Food Group undervalued compared to its fair value and its price relative to the market?

19.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MTY (CA$52.91) is trading below our estimate of fair value (CA$65.83)

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


Price To Earnings Ratio

PE vs Industry: MTY is good value based on its PE Ratio (18.2x) compared to the Hospitality industry average (19.3x).

PE vs Market: MTY is poor value based on its PE Ratio (18.2x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

PEG Ratio: MTY is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: MTY is overvalued based on its PB Ratio (2x) compared to the CA Hospitality industry average (1.3x).


Next Steps

Future Growth

How is MTY Food Group forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MTY's forecast earnings growth (13.6% per year) is above the savings rate (1.9%).

Earnings vs Market: MTY's earnings (13.6% per year) are forecast to grow faster than the Canadian market (13% per year).

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

Revenue vs Market: MTY's revenue (7.9% per year) is forecast to grow faster than the Canadian market (5.5% per year).

High Growth Revenue: MTY's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

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


Next Steps

Past Performance

How has MTY Food Group performed over the past 5 years?

27.8%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: MTY's earnings have grown significantly by 27.8% per year over the past 5 years.

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

Earnings vs Industry: MTY had negative earnings growth (-28.4%) over the past year, making it difficult to compare to the Hospitality industry average (-12.2%).


Return on Equity

High ROE: MTY's Return on Equity (11.2%) is considered low.


Return on Assets

ROA vs Industry: MTY has a higher Return on Assets than the Hospitality industry average last year.


Return on Capital Employed

ROCE Improving: MTY's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is MTY Food Group's financial position?


Financial Position Analysis

Short Term Liabilities: MTY's short term assets (CA$146.5M) do not cover its short term liabilities (CA$235.5M)

Long Term Liabilities: MTY's short term assets (146.5M) do not cover its long term liabilities (767.2M)


Debt to Equity History and Analysis

Debt Level: MTY's debt to equity ratio (87.4%) is considered high

Reducing Debt: MTY's debt to equity ratio has increased from 11.2% to 87.4% over the past 5 years.

Debt Coverage: MTY's debt is not well covered by operating cash flow (18.5%).

Interest Coverage: MTY's interest payments on its debt are well covered by EBIT (7.8x coverage).


Balance Sheet

Inventory Level: MTY has a low level of unsold assets or inventory.

Debt Coverage by Assets: MTY's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is MTY Food Group's current dividend yield, its reliability and sustainability?

1.25%

Current Dividend Yield


Dividend Yield vs Market

company1.2%marketbottom25%2.0%markettop25%5.9%industryaverage2.7%forecastin3Years1.3%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: MTY's dividend (1.25%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.98%).

High Dividend: MTY's dividend (1.25%) is low compared to the top 25% of dividend payers in the Canadian market (5.92%).

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

Growing Dividend: MTY's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.2%), MTY's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of MTY Food Group's salary, the management and board of directors tenure and is there insider trading?

2.4yrs

Average management tenure


CEO

Eric Lefebvre (42yo)

0.9yrs

Tenure

CA$385,342

Compensation

Mr. Eric Lefebvre, CPA, CA, MBA, QC, has been Chief Executive Officer and Director of MTY Food Group Inc. since November 5, 2018 and May 28, 2018 respectively. He has been Director and Vice President of Pa ...


CEO Compensation Analysis

Compensation vs. Market: Eric has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Canadian market.

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


Management Age and Tenure

2.4yrs

Average Tenure

50yo

Average Age

Experienced Management: MTY's management team is considered experienced (2.4 years average tenure).


Board Age and Tenure

8.7yrs

Average Tenure

59yo

Average Age

Experienced Board: MTY's board of directors are considered experienced (8.7 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

BuyCA$109,74006 May 19
Murat Armutlu
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceCA$54.87
SellCA$426,40809 Nov 18
Dickie Orr
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,000
Max PriceCA$71.23

Ownership Breakdown


Management Team

  • Stanley Ma (72yo)

    Chairman & President

    • Tenure: 22.4yrs
    • Compensation: CA$467.66k
  • Claude St-Pierre (50yo)

    Secretary & Non-Independent Director

    • Tenure: 23yrs
    • Compensation: CA$8.74k
  • Jason Brading

    Chief Operating Officer of Quick Service Restaurants

    • Tenure: 0.9yrs
  • Eric Lefebvre (42yo)

    CEO & Director

    • Tenure: 0.9yrs
    • Compensation: CA$385.34k
  • Jeff Smit (61yo)

    Chief Operating Officer of US Operations

    • Tenure: 3.3yrs
    • Compensation: CA$480.78k
  • Marc Benzacar

    Chief Operating Officer of Fast Casual Division

    • Tenure: 10.9yrs
    • Compensation: CA$294.61k
  • Marie-Line Beauchamp

    Chief Operating Officer of Casual Dining

    • Tenure: 1.6yrs
    • Compensation: CA$378.98k
  • Renée St-Onge (39yo)

    Chief Financial Officer

    • Tenure: 0.9yrs
    • Compensation: CA$97.70k

Board Members

  • Murat Armutlu (59yo)

    Independent Director

    • Tenure: 14.4yrs
    • Compensation: CA$20.94k
  • Stanley Ma (72yo)

    Chairman & President

    • Tenure: 22.4yrs
    • Compensation: CA$467.66k
  • Claude St-Pierre (50yo)

    Secretary & Non-Independent Director

    • Tenure: 23yrs
    • Compensation: CA$8.74k
  • Eric Lefebvre (42yo)

    CEO & Director

    • Tenure: 0.9yrs
    • Compensation: CA$385.34k
  • David Wong (51yo)

    Independent Director

    • Tenure: 8.7yrs
    • Compensation: CA$15.70k
  • Dickie Orr (67yo)

    Independent Director

    • Tenure: 8.4yrs
    • Compensation: CA$15.70k
  • Gary O'Connor (71yo)

    Additional Director

    • Tenure: 1.6yrs
    • Compensation: CA$12.09k

Company Information

MTY Food Group Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: MTY Food Group Inc.
  • Ticker: MTY
  • Exchange: TSX
  • Founded: 1979
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: CA$1.332b
  • Shares outstanding: 25.17m
  • Website: https://www.mtygroup.com

Number of Employees


Location

  • MTY Food Group Inc.
  • 8210 Trans-Canada Highway
  • Saint-Laurent
  • Quebec
  • H4S 1M5
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MTYTSX (The Toronto Stock Exchange)YesCommon SharesCACADFeb 1989
9MFDB (Deutsche Boerse AG)YesCommon SharesDEEURFeb 1989
MTYF.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDFeb 1989

Biography

MTY Food Group Inc. operates as a franchisor in the quick service and casual dining food industry in Canada, the United States, and internationally. The company franchises and operates corporate-owned loca ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 23:37
End of Day Share Price2019/10/22 00:00
Earnings2019/08/31
Annual Earnings2018/11/30


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.