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MCY

Mercury NZ NZSE:MCY Stock Report

Last Price

NZ$5.69

Market Cap

NZ$8.0b

7D

5.2%

1Y

-13.1%

Updated

27 Jun, 2022

Data

Company Financials +
MCY fundamental analysis
Snowflake Score
Valuation5/6
Future Growth0/6
Past Performance4/6
Financial Health3/6
Dividends2/6

MCY Stock Overview

Mercury NZ Limited, together with its subsidiaries, engages in the production, trading, and sale of electricity and related activities in New Zealand.

Mercury NZ Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Mercury NZ
Historical stock prices
Current Share PriceNZ$5.69
52 Week HighNZ$7.00
52 Week LowNZ$5.20
Beta0.54
1 Month Change1.61%
3 Month Change-4.69%
1 Year Change-13.13%
3 Year Change25.33%
5 Year Change70.36%
Change since IPO117.18%

Recent News & Updates

May 18
Mercury NZ Limited (NZSE:MCY) Shares Could Be 24% Below Their Intrinsic Value Estimate

Mercury NZ Limited (NZSE:MCY) Shares Could Be 24% Below Their Intrinsic Value Estimate

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Mercury NZ Limited...

Mar 28
Here's Why Mercury NZ (NZSE:MCY) Has A Meaningful Debt Burden

Here's Why Mercury NZ (NZSE:MCY) Has A Meaningful Debt Burden

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

Shareholder Returns

MCYNZ Electric UtilitiesNZ Market
7D5.2%1.2%1.7%
1Y-13.1%-12.2%-17.4%

Return vs Industry: MCY matched the NZ Electric Utilities industry which returned -12.2% over the past year.

Return vs Market: MCY exceeded the NZ Market which returned -17.4% over the past year.

Price Volatility

Is MCY's price volatile compared to industry and market?
MCY volatility
MCY Average Weekly Movement3.7%
Electric Utilities Industry Average Movement3.6%
Market Average Movement4.4%
10% most volatile stocks in NZ Market8.6%
10% least volatile stocks in NZ Market2.9%

Stable Share Price: MCY is not significantly more volatile than the rest of NZ stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: MCY's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1998752Vince James Hawksworthhttps://www.mercury.co.nz

Mercury NZ Limited, together with its subsidiaries, engages in the production, trading, and sale of electricity and related activities in New Zealand. The company operates through Generation/Wholesale, Retail, and Other segments. It operates 9 hydro generation stations on the Waikato River; and 5 geothermal generation stations in the central North Island.

Mercury NZ Fundamentals Summary

How do Mercury NZ's earnings and revenue compare to its market cap?
MCY fundamental statistics
Market CapNZ$7.96b
Earnings (TTM)NZ$438.00m
Revenue (TTM)NZ$1.97b

18.2x

P/E Ratio

4.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MCY income statement (TTM)
RevenueNZ$1.97b
Cost of RevenueNZ$1.56b
Gross ProfitNZ$415.00m
Other Expenses-NZ$23.00m
EarningsNZ$438.00m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)0.31
Gross Margin21.02%
Net Profit Margin22.19%
Debt/Equity Ratio34.5%

How did MCY perform over the long term?

See historical performance and comparison

Dividends

3.2%

Current Dividend Yield

57%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

MCY 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/Revenue4.9x
Enterprise Value/EBITDA24.3x
PEG Ratio-1.4x

Price to Earnings Ratio vs Peers

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

MCY PE Ratio vs Peers
The above table shows the PE ratio for MCY vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average53.8x
CEN Contact Energy
23.5x2.0%NZ$5.7b
IFT Infratil
131.5x63.2%NZ$5.7b
GNE Genesis Energy
42.8x1.5%NZ$2.8b
MNW Manawa Energy
17.5x-2.2%NZ$1.8b
MCY Mercury NZ
18.2x-12.9%NZ$8.0b

Price-To-Earnings vs Peers: MCY is good value based on its Price-To-Earnings Ratio (18.2x) compared to the peer average (53.8x).


Price to Earnings Ratio vs Industry

How does MCY's PE Ratio compare vs other companies in the Global Electric Utilities Industry?

Price-To-Earnings vs Industry: MCY is good value based on its Price-To-Earnings Ratio (18.2x) compared to the NZ Electric Utilities industry average (23.3x)


Price to Earnings Ratio vs Fair Ratio

What is MCY'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.

MCY PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio18.2x
Fair PE Ratio28.6x

Price-To-Earnings vs Fair Ratio: MCY is good value based on its Price-To-Earnings Ratio (18.2x) compared to the estimated Fair Price-To-Earnings Ratio (28.6x).


Share Price vs Fair Value

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

Below Fair Value: MCY (NZ$5.69) is trading below our estimate of fair value (NZ$7.74)

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


Price to Earnings Growth Ratio

PEG Ratio: MCY's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


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Future Growth

How is Mercury NZ forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-12.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCY's earnings are forecast to decline over the next 3 years (-12.9% per year).

Earnings vs Market: MCY's earnings are forecast to decline over the next 3 years (-12.9% per year).

High Growth Earnings: MCY's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MCY's revenue (0.3% per year) is forecast to grow slower than the NZ market (6.7% per year).

High Growth Revenue: MCY's revenue (0.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MCY's Return on Equity is forecast to be low in 3 years time (5.6%).


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Past Performance

How has Mercury NZ performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


7.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MCY has a large one-off gain of NZ$347.0M impacting its December 31 2021 financial results.

Growing Profit Margin: MCY's current net profit margins (22.2%) are higher than last year (14.3%).


Past Earnings Growth Analysis

Earnings Trend: MCY's earnings have grown by 7.8% per year over the past 5 years.

Accelerating Growth: MCY's earnings growth over the past year (71.1%) exceeds its 5-year average (7.8% per year).

Earnings vs Industry: MCY earnings growth over the past year (71.1%) exceeded the Electric Utilities industry 8.2%.


Return on Equity

High ROE: MCY's Return on Equity (9.5%) is considered low.


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Financial Health

How is Mercury NZ's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: MCY's short term assets (NZ$440.0M) do not cover its short term liabilities (NZ$811.0M).

Long Term Liabilities: MCY's short term assets (NZ$440.0M) do not cover its long term liabilities (NZ$3.1B).


Debt to Equity History and Analysis

Debt Level: MCY's net debt to equity ratio (33.4%) is considered satisfactory.

Reducing Debt: MCY's debt to equity ratio has reduced from 35.4% to 34.5% over the past 5 years.

Debt Coverage: MCY's debt is not well covered by operating cash flow (19.6%).

Interest Coverage: MCY's interest payments on its debt are well covered by EBIT (3.4x coverage).


Balance Sheet


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Dividend

What is Mercury NZ current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


3.20%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MCY's dividend (3.2%) is higher than the bottom 25% of dividend payers in the NZ market (3.02%).

High Dividend: MCY's dividend (3.2%) is low compared to the top 25% of dividend payers in the NZ market (6.25%).


Stability and Growth of Payments

Stable Dividend: MCY has been paying a dividend for less than 10 years and during this time payments have been volatile.

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


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (56.7%), MCY's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (217.6%), MCY's dividend payments are not well covered by cash flows.


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Management

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

5.9yrs

Average management tenure


CEO

Vince James Hawksworth (63 yo)

2.25yrs

Tenure

NZ$1,799,515

Compensation

Mr. Vincent John James Hawksworth, also Known as Vince, C.ENG, MBA, MIMinE, had been Non-Independent Director at Tilt Renewables Limited since April 1, 2020. He serves as Chief Executive Officer at Mercury...


CEO Compensation Analysis

Compensation vs Market: Vince's total compensation ($USD1.14M) is below average for companies of similar size in the NZ market ($USD1.76M).

Compensation vs Earnings: Vince's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: MCY's management team is seasoned and experienced (5.9 years average tenure).


Board Members

Experienced Board: MCY's board of directors are considered experienced (7.4 years average tenure).


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 been diluted in the past year, with total shares outstanding growing by 2.7%.


Top Shareholders

Company Information

Mercury NZ Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Mercury NZ Limited
  • Ticker: MCY
  • Exchange: NZSE
  • Founded: 1998
  • Industry: Electric Utilities
  • Sector: Utilities
  • Implied Market Cap: NZ$7.958b
  • Shares outstanding: 1.40b
  • Website: https://www.mercury.co.nz

Number of Employees


Location

  • Mercury NZ Limited
  • 33 Broadway
  • Newmarket
  • Auckland
  • 1023
  • New Zealand

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/06/27 00:00
End of Day Share Price2022/06/27 00:00
Earnings2021/12/31
Annual Earnings2021/06/30


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.