DB:ME5A

Stock Analysis Report

Methode Electronics

Executive Summary

Methode Electronics, Inc. designs, manufactures, and markets component and subsystem devices worldwide.

Rewards

Trading at 45.5% below its fair value

Earnings are forecast to grow 13.81% per year

Earnings grew by 107.1% over the past year

Risk Analysis

No risks detected for ME5A from our risk checks.


Snowflake Analysis

Very undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Methode Electronics's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ME5A has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

ME5A

-1.9%

DE Electronic

-0.9%

DE Market


1 Year Return

27.1%

ME5A

8.5%

DE Electronic

12.8%

DE Market

Return vs Industry: ME5A exceeded the German Electronic industry which returned 8.5% over the past year.

Return vs Market: ME5A exceeded the German Market which returned 12.8% over the past year.


Shareholder returns

ME5AIndustryMarket
7 Day0%-1.9%-0.9%
30 Day-8.6%8.2%-0.4%
90 Day-2.5%8.8%2.3%
1 Year28.9%27.1%10.9%8.5%16.3%12.8%
3 Year-16.2%-19.2%49.7%44.8%15.8%5.7%
5 Year-3.8%-9.3%114.5%99.2%19.7%3.3%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Methode Electronics undervalued compared to its fair value and its price relative to the market?

45.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ME5A (€31.8) is trading below our estimate of fair value (€58.39)

Significantly Below Fair Value: ME5A is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ME5A is good value based on its PE Ratio (12.1x) compared to the Electronic industry average (29.8x).

PE vs Market: ME5A is good value based on its PE Ratio (12.1x) compared to the German market (21x).


Price to Earnings Growth Ratio

PEG Ratio: ME5A is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: ME5A is good value based on its PB Ratio (1.7x) compared to the DE Electronic industry average (1.9x).


Next Steps

Future Growth

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

13.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ME5A's forecast earnings growth (13.8% per year) is above the savings rate (-0.4%).

Earnings vs Market: ME5A's earnings (13.8% per year) are forecast to grow faster than the German market (13% per year).

High Growth Earnings: ME5A's earnings are forecast to grow, but not significantly.

Revenue vs Market: ME5A's revenue (5.5% per year) is forecast to grow faster than the German market (5.2% per year).

High Growth Revenue: ME5A's revenue (5.5% 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 ME5A's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Methode Electronics performed over the past 5 years?

-5.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ME5A has high quality earnings.

Growing Profit Margin: ME5A's current net profit margins (10.1%) are higher than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: ME5A's earnings have declined by -5.8% per year over the past 5 years.

Accelerating Growth: ME5A's earnings growth over the past year (107.1%) exceeds its 5-year average (-5.8% per year).

Earnings vs Industry: ME5A earnings growth over the past year (107.1%) exceeded the Electronic industry -3.9%.


Return on Equity

High ROE: ME5A's Return on Equity (14.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Methode Electronics's financial position?


Financial Position Analysis

Short Term Liabilities: ME5A's short term assets ($465.4M) exceed its short term liabilities ($184.3M).

Long Term Liabilities: ME5A's short term assets ($465.4M) exceed its long term liabilities ($365.8M).


Debt to Equity History and Analysis

Debt Level: ME5A's debt to equity ratio (37.6%) is considered satisfactory.

Reducing Debt: ME5A's debt to equity ratio has increased from 7.2% to 37.6% over the past 5 years.

Debt Coverage: ME5A's debt is well covered by operating cash flow (48.6%).

Interest Coverage: ME5A's interest payments on its debt are well covered by EBIT (11.8x coverage).


Balance Sheet

Inventory Level: ME5A has a high level of physical assets or inventory.

Debt Coverage by Assets: ME5A's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

What is Methode Electronics's current dividend yield, its reliability and sustainability?

1.29%

Current Dividend Yield


Dividend Yield vs Market

company1.3%marketbottom25%1.3%markettop25%3.6%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: ME5A's dividend (1.29%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: ME5A's dividend (1.29%) is low compared to the top 25% of dividend payers in the German market (3.63%).


Stability and Growth of Payments

Stable Dividend: ME5A's dividends per share have been stable in the past 10 years.

Growing Dividend: ME5A's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (15.7%), ME5A'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

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

1.8yrs

Average management tenure


CEO

Donald Duda (64yo)

15.8yrs

Tenure

US$1,389,578

Compensation

Mr. Donald W. Duda, also known as Don, has been the Chief Executive Officer of Methode Electronics, Inc. since May 1, 2004 and its President since February 2001. Mr. Duda served as Vice President of Interc ...


CEO Compensation Analysis

Compensation vs Market: Donald's total compensation ($USD1.39M) is about average for companies of similar size in the German market ($USD1.52M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Donald Duda
President15.8yrsUS$1.39m1.09% $12.6m
Ronald Tsoumas
VP of Corporate Finance & CFO1.9yrsUS$489.03k0.18% $2.1m
Joseph Khoury
Chief Operating Officer1.6yrsUS$645.52k0.73% $8.5m
Anil Shetty
VP & President of Dabir Surfaces1.4yrsUS$838.50k0.21% $2.5m
Michael Brotherton
VP & President of Grakon Parent1.4yrsUS$817.18k0.072% $839.8k
Kristine Walczak
Vice President of Corporate Communications0yrsno datano data
Mark Shermetaro
Vice President of Corporate Development0yrsno datano data
Andrea Barry
Chief Human Resources Officer1.9yrsUS$1.41m0.058% $671.8k

1.8yrs

Average Tenure

55.5yo

Average Age

Experienced Management: ME5A's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Donald Duda
President15.8yrsUS$1.39m1.09% $12.6m
Lawrence Skatoff
Independent Vice Chairman of the Board0.4yrsUS$194.25k0.12% $1.4m
Bruce Crowther
Independent Director0.7yrsno data0.011% $122.3k
Walter Aspatore
Independent Chairman of the Board7.4yrsUS$235.25k0.089% $1.0m
Mark Schwabero
Independent Director0.7yrsno data0.0081% $94.1k
David Blom
Director0.2yrsno datano data
Isabelle Goossen
Independent Director15.7yrsUS$224.25k0.12% $1.4m
Darren Dawson
Independent Director15.7yrsUS$206.25k0.043% $501.9k
Angelo Pantaleo
Director0.2yrsno datano data
Brian Cadwallader
Independent Director2yrsUS$191.25kno data

1.3yrs

Average Tenure

65.5yo

Average Age

Experienced Board: ME5A's board of directors are not considered experienced ( 1.3 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Methode Electronics, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Methode Electronics, Inc.
  • Ticker: ME5A
  • Exchange: DB
  • Founded: 1946
  • Industry: Electronic Manufacturing Services
  • Sector: Tech
  • Market Cap: US$1.264b
  • Listing Market Cap: US$1.163b
  • Shares outstanding: 37.09m
  • Website: https://www.methode.com

Number of Employees


Location

  • Methode Electronics, Inc.
  • 8750 West Bryn Mawr Avenue
  • Suite 1000
  • Chicago
  • Illinois
  • 60631
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MEINYSE (New York Stock Exchange)YesCommon SharesUSUSDSep 1982
ME5ADB (Deutsche Boerse AG)YesCommon SharesDEEURSep 1982

Biography

Methode Electronics, Inc. designs, manufactures, and markets component and subsystem devices worldwide. It operates through Automotive, Industrial, Interface, and Medical segments. The Automotive segment supplies electronic and electro-mechanical devices, and related products to automobile OEMs directly or through their tiered suppliers. Its products include integrated center consoles, hidden switches, ergonomic switches, transmission lead-frames, LED-based lighting, and sensors, which incorporate magneto-elastic sensing and other technologies that monitor the operation or status of a component or system. The Industrial segment manufactures external lighting solutions; industrial safety radio remote controls; braided flexible cables; current-carrying laminated busbars and devices; custom power-product assemblies, such as PowerRail solution; high-current low-voltage flexible power cabling systems; and powder-coated busbars that are used in various markets and applications comprising aerospace, computers, industrial, power conversion, military, telecommunications, and transportation. The Interface segment provides various copper and fiber-optic interface, and interface solutions for the appliance, commercial food service, construction, consumer, material handling, point-of-sale, and telecommunications markets. Its solutions comprise copper transceivers and solid-state field-effect consumer touch panels. The Medical segment offers Dabir Surfaces, a surface support technology aimed at pressure injury prevention for use by patients who are immobilized or otherwise at risk for pressure injuries, including patients undergoing long-duration surgical procedures. The company was founded in 1946 and is headquartered in Chicago, Illinois. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 22:40
End of Day Share Price2020/02/21 00:00
Earnings2019/10/26
Annual Earnings2019/04/27


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.