Executive Summary
Neo Performance Materials Inc. manufactures and sells rare earth and rare metal-based functional materials in Canada and internationally.
Rewards
Risk Analysis
Snowflake Analysis
Undervalued with excellent balance sheet.
Similar Companies
Share Price & News
How has Neo Performance Materials's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: NEO has not had significant price volatility in the past 3 months.
Market Performance
7 Day Return
-5.4%
NEO
1.5%
CA Chemicals
2.1%
CA Market
1 Year Return
-33.8%
NEO
-33.2%
CA Chemicals
-9.6%
CA Market
Return vs Industry: NEO underperformed the Canadian Chemicals industry which returned -31.9% over the past year.
Return vs Market: NEO underperformed the Canadian Market which returned -10.8% over the past year.
Shareholder returns
| NEO | Industry | Market | |
|---|---|---|---|
| 7 Day | -5.4% | 1.5% | 2.1% |
| 30 Day | -8.8% | -7.3% | 3.2% |
| 90 Day | 2.4% | -3.6% | 12.4% |
| 1 Year | -31.0%-33.8% | -30.1%-33.2% | -6.4%-9.6% |
| 3 Year | n/a | -39.9%-43.8% | 7.0%-3.3% |
| 5 Year | n/a | -36.6%-44.2% | 26.6%7.2% |
Price Volatility Vs. Market
How volatile is Neo Performance Materials's share price compared to the market and industry in the last 5 years?
Simply Wall St News
1 year ago | Simply Wall St
Have Insiders Been Buying Neo Performance Materials Inc (TSE:NEO) Shares?1 year ago | Simply Wall St
Is Neo Performance Materials Inc (TSE:NEO) A Great Dividend Stock?1 year ago | Simply Wall St
Neo Performance Materials Inc (TSE:NEO) Is Trading At A 21.99% DiscountValuation
Is Neo Performance Materials 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: NEO (CA$7.96) is trading below our estimate of fair value (CA$24.23)
Significantly Below Fair Value: NEO is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: NEO is good value based on its PE Ratio (20.3x) compared to the CA Chemicals industry average (20.9x).
PE vs Market: NEO is poor value based on its PE Ratio (20.3x) compared to the Canadian market (13.2x).
Price to Earnings Growth Ratio
PEG Ratio: NEO is good value based on its PEG Ratio (0.5x)
Price to Book Ratio
PB vs Industry: NEO is good value based on its PB Ratio (0.5x) compared to the CA Chemicals industry average (1.6x).
Next Steps
Future Growth
How is Neo Performance Materials forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?
44.3%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: NEO's forecast earnings growth (44.3% per year) is above the savings rate (1.7%).
Earnings vs Market: NEO's earnings (44.3% per year) are forecast to grow faster than the Canadian market (23.6% per year).
High Growth Earnings: earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: NEO's revenue (4% per year) is forecast to grow slower than the Canadian market (5.5% per year).
High Growth Revenue: NEO's revenue (4% 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 NEO's Return on Equity is forecast to be high in 3 years time
Next Steps
Past Performance
How has Neo Performance Materials performed over the past 5 years?
38.1%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: NEO has high quality earnings.
Growing Profit Margin: NEO's current net profit margins (2.8%) are lower than last year (10%).
Past Earnings Growth Analysis
Earnings Trend: NEO's earnings have grown significantly by 38.1% per year over the past 5 years.
Accelerating Growth: NEO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: NEO had negative earnings growth (-75%) over the past year, making it difficult to compare to the Chemicals industry average (-41%).
Return on Equity
High ROE: NEO's Return on Equity (2.7%) is considered low.
Next Steps
Financial Health
How is Neo Performance Materials's financial position?
Financial Position Analysis
Short Term Liabilities: NEO's short term assets ($256.3M) exceed its short term liabilities ($71.9M).
Long Term Liabilities: NEO's short term assets ($256.3M) exceed its long term liabilities ($25.9M).
Debt to Equity History and Analysis
Debt Level: NEO's debt to equity ratio (0.3%) is considered satisfactory.
Reducing Debt: Insufficient data to determine if NEO's debt to equity ratio has reduced over the past 5 years.
Debt Coverage: NEO's debt is well covered by operating cash flow (5036.7%).
Interest Coverage: NEO's interest payments on its debt are well covered by EBIT (14.7x coverage).
Balance Sheet
Next Steps
Dividend
What is Neo Performance Materials's current dividend yield, its reliability and sustainability?
4.86%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: NEO's dividend (4.86%) is higher than the bottom 25% of dividend payers in the Canadian market (1.87%).
High Dividend: NEO's dividend (4.86%) is low compared to the top 25% of dividend payers in the Canadian market (5.99%).
Stability and Growth of Payments
Stable Dividend: Whilst dividend payments have been stable, NEO has been paying a dividend for less than 10 years.
Growing Dividend: NEO has only been paying a dividend for 2 years, and since then payments have fallen.
Current Payout to Shareholders
Dividend Coverage: With its high payout ratio (105.6%), NEO's dividend payments are not well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: NEO's dividends in 3 years are forecast to be covered by earnings (60.3% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
3.9yrs
Average management tenure
CEO
Constantine Karayannopoulos (59yo)
no data
Tenure
US$240,000
Compensation
Mr. Constantine E. Karayannopoulos, BASc, MASc, PEng., has been President and Chief Executive Officer at Neo Performance Materials Inc. since July 07, 2020. Mr. Karayannopoulos was the Chairman and Directo ...
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | no data | US$240.00k | 0.0099% $29.2k | |
| Chief Financial Officer | 2.83yrs | US$604.39k | 0.10% $302.6k | |
| Executive VP & COO | 2.83yrs | US$658.77k | 0.074% $219.0k | |
| Executive Vice President of Neo Chemicals & Oxides | 3.92yrs | US$519.44k | 0.047% $137.3k | |
| Executive Vice President of Magnquech | 5.5yrs | US$1.18m | 0.026% $77.9k | |
| Capital Markets & IR Executive | no data | no data | no data | |
| Senior Vice President of Neo Rare Metals | 3.92yrs | no data | 0.023% $67.8k | |
| Corporate Secretary | no data | no data | no data |
3.9yrs
Average Tenure
Experienced Management: NEO's management team is considered experienced (3.9 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| President | no data | US$240.00k | 0.0099% $29.2k | |
| Independent Director | 1.08yrs | no data | no data | |
| Independent Director | 2.75yrs | no data | no data | |
| Lead Independent Director | 2.75yrs | US$147.00k | 0.0070% $20.7k | |
| Independent Chairman of the Board | no data | US$145.00k | no data | |
| Independent Director | 2.75yrs | no data | no data |
2.8yrs
Average Tenure
55.5yo
Average Age
Experienced Board: NEO's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.
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.
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Neo Performance Materials Inc.'s company bio, employee growth, exchange listings and data sources
Key Information
- Name: Neo Performance Materials Inc.
- Ticker: NEO
- Exchange: TSX
- Founded: 1994
- Industry: Specialty Chemicals
- Sector: Materials
- Market Cap: CA$294.224m
- Shares outstanding: 37.67m
- Website: https://www.neomaterials.com
Number of Employees
Location
- Neo Performance Materials Inc.
- 121 King Street West
- Suite 1740
- Toronto
- Ontario
- M5H 3T9
- Canada
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| NEO | TSX (The Toronto Stock Exchange) | Yes | Common Shares | CA | CAD | Dec 2017 |
| N14 | DB (Deutsche Boerse AG) | Yes | Common Shares | DE | EUR | Dec 2017 |
| NOPM.F | OTCPK (Pink Sheets LLC) | Yes | Common Shares | US | USD | Dec 2017 |
Biography
Neo Performance Materials Inc. manufactures and sells rare earth and rare metal-based functional materials in Canada and internationally. The company operates in three segments: Magnequench, Chemicals and Oxides, and Rare Metals. The Magnequench segment produces magnetic powders that are used in bonded and hot deformed fully dense neodymium-iron-boron magnets. Its powders are used in the production of bonded permanent magnets that are components in automotive motors, micro motors, traction motors, sensors, and other applications. The Chemicals and Oxides segments manufactures and distributes a range of industrial materials for use in auto catalyst, consumer electronic, petroleum refining, hybrid and electric vehicle, and municipal and industrial wastewater treatment applications. The Rare Metals segment sources, produces, reclaims, refines, and markets high-temperature metals that include tantalum, niobium, hafnium, and rhenium; and electronic metals, such as gallium and indium. Its products are applied in super alloys for jet engines, medical imaging, wireless technologies, and LED lightings, as well as flat panel displays, solar, steel additives, batteries, and electronic applications. Neo Performance Materials Inc. was founded in 1994 and is headquartered in Toronto, Canada.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/07/15 00:02 |
| End of Day Share Price | 2020/07/14 00:00 |
| Earnings | 2020/03/31 |
| Annual Earnings | 2019/12/31 |
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.