TSX:NEO

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Neo Performance Materials

Executive Summary

Neo Performance Materials Inc. manufactures and sells rare earth and rare metal-based functional materials in Canada and internationally.


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

NEOIndustryMarket
7 Day-5.4%1.5%2.1%
30 Day-8.8%-7.3%3.2%
90 Day2.4%-3.6%12.4%
1 Year-31.0%-33.8%-30.1%-33.2%-6.4%-9.6%
3 Yearn/a-39.9%-43.8%7.0%-3.3%
5 Yearn/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

Valuation

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

NamePositionTenureCompensationOwnership
Constantine Karayannopoulos
Presidentno dataUS$240.00k0.0099% $29.2k
Rahim Suleman
Chief Financial Officer2.83yrsUS$604.39k0.10% $302.6k
Kevin Morris
Executive VP & COO2.83yrsUS$658.77k0.074% $219.0k
Jeffrey Hogan
Executive Vice President of Neo Chemicals & Oxides3.92yrsUS$519.44k0.047% $137.3k
Gregory Kroll
Executive Vice President of Magnquech5.5yrsUS$1.18m0.026% $77.9k
Ali Mahdavi
Capital Markets & IR Executiveno datano datano data
Frank Timmerman
Senior Vice President of Neo Rare Metals3.92yrsno data0.023% $67.8k
Alexander Caldwell
Corporate Secretaryno datano datano data

3.9yrs

Average Tenure

Experienced Management: NEO's management team is considered experienced (3.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Constantine Karayannopoulos
Presidentno dataUS$240.00k0.0099% $29.2k
G. Edwards
Independent Director1.08yrsno datano data
Edgar Lee
Independent Director2.75yrsno datano data
Eric Noyrez
Lead Independent Director2.75yrsUS$147.00k0.0070% $20.7k
Claire M. Kennedy
Independent Chairman of the Boardno dataUS$145.00kno data
Brook Hinchman
Independent Director2.75yrsno datano 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

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NEOTSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 2017
N14DB (Deutsche Boerse AG)YesCommon SharesDEEURDec 2017
NOPM.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDDec 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

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/15 00:02
End of Day Share Price2020/07/14 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.