NZSE:MCY

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

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


Snowflake Analysis

Adequate balance sheet with questionable track record.


Similar Companies

Share Price & News

How has Mercury NZ's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-6.2%

MCY

-2.2%

NZ Electric Utilities

-0.8%

NZ Market


1 Year Return

2.8%

MCY

2.6%

NZ Electric Utilities

7.5%

NZ Market

Return vs Industry: MCY matched the NZ Electric Utilities industry which returned 2.6% over the past year.

Return vs Market: MCY underperformed the NZ Market which returned 7.5% over the past year.


Shareholder returns

MCYIndustryMarket
7 Day-6.2%-2.2%-0.8%
30 Day6.6%12.7%7.2%
90 Day10.0%15.4%6.8%
1 Year6.7%2.8%8.1%2.6%11.8%7.5%
3 Year73.5%52.0%73.3%45.2%47.3%28.0%
5 Year139.5%82.3%96.9%46.5%100.1%51.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Mercury NZ undervalued compared to its fair value and its price relative to the market?

33.93x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: MCY (NZ$5.16) is trading above our estimate of fair value (NZ$4.51)

Significantly Below Fair Value: MCY is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: MCY is good value based on its PE Ratio (33.9x) compared to the NZ Electric Utilities industry average (34.3x).

PE vs Market: MCY is poor value based on its PE Ratio (33.9x) compared to the NZ market (23.3x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: MCY's PB Ratio (1.9x) is in line with the NZ Electric Utilities industry average.


Next Steps

Future Growth

How is Mercury NZ forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

-4.9%

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 (-4.9% per year).

Earnings vs Market: MCY's earnings are forecast to decline over the next 3 years (-4.9% per year).

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

Revenue vs Market: MCY's revenue is expected to decline over the next 3 years (-5.9% per year).

High Growth Revenue: MCY's revenue is forecast to decline over the next 3 years (-5.9% 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 (4.2%).


Next Steps

Past Performance

How has Mercury NZ performed over the past 5 years?

21.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCY has high quality earnings.

Growing Profit Margin: MCY's current net profit margins (11.7%) are lower than last year (17.8%).


Past Earnings Growth Analysis

Earnings Trend: MCY's earnings have grown significantly by 21.3% per year over the past 5 years.

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

Earnings vs Industry: MCY had negative earnings growth (-42%) over the past year, making it difficult to compare to the Electric Utilities industry average (-21.9%).


Return on Equity

High ROE: MCY's Return on Equity (5.5%) is considered low.


Next Steps

Financial Health

How is Mercury NZ's financial position?


Financial Position Analysis

Short Term Liabilities: MCY's short term assets (NZ$473.0M) do not cover its short term liabilities (NZ$875.0M).

Long Term Liabilities: MCY's short term assets (NZ$473.0M) do not cover its long term liabilities (NZ$2.3B).


Debt to Equity History and Analysis

Debt Level: MCY's debt to equity ratio (36.1%) is considered satisfactory.

Reducing Debt: MCY's debt to equity ratio has reduced from 40.3% to 36.1% over the past 5 years.

Debt Coverage: MCY's debt is well covered by operating cash flow (26.4%).

Interest Coverage: MCY's interest payments on its debt are well covered by EBIT (5.2x coverage).


Balance Sheet


Next Steps

Dividend

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

3.06%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MCY's dividend (3.06%) is higher than the bottom 25% of dividend payers in the NZ market (2.76%).

High Dividend: MCY's dividend (3.06%) is low compared to the top 25% of dividend payers in the NZ market (4.44%).


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 7 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (103.9%), MCY's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MCY's dividends in 3 years are not forecast to be well covered by earnings (151% payout ratio).


Next Steps

Management

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

4.3yrs

Average management tenure


CEO

Vince Hawksworth (61 yo)

0.58

Tenure

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


Leadership Team

NamePositionTenureCompensationOwnership
Vincent Hawksworth
Chief Executive Officer0.58yrno data0.00031%
NZ$ 22.0k
William Meek
Chief Financial Officerno datano data0.0073%
NZ$ 521.1k
Tim Thompson
Head of Treasury & Investor Relationsno datano datano data
Howard Thomas
Company Secretary & General Counselno datano datano data
Craig Dowling
Head of Communicationsno datano datano data
Julia Jack
Chief Marketing Officer4.25yrsno data0.0023%
NZ$ 160.5k
Marlene Strawson
General Manager of People & Performance6.25yrsno data0.0045%
NZ$ 319.5k
Dennis Radich
Manager of Generation Developmentno datano datano data

4.3yrs

Average Tenure

Experienced Management: MCY's management team is considered experienced (4.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Keith Smith
Independent Director11.42yrsNZ$124.00k0.0022%
NZ$ 156.9k
Patrick Strange
Independent Non-Executive Director6.67yrsNZ$108.00k0.0029%
NZ$ 203.8k
Scott St John
Independent Director3.08yrsNZ$106.67k0.0033%
NZ$ 234.3k
Andrew Lark
Independent Non-Executive Director6.25yrsNZ$106.00k0.00024%
NZ$ 17.0k
James Miller
Independent Non-Executive Director8.42yrsNZ$117.50k0.0030%
NZ$ 210.1k
Prudence Flacks
Independent Chairman1.08yrsNZ$122.00k0.0019%
NZ$ 137.7k
Michael Taitoko
Independent Director5.17yrsNZ$106.00k0.00016%
NZ$ 11.4k
Hannah Hamling
Independent Director0.67yrno data0.000070%
NZ$ 5.0k

5.7yrs

Average Tenure

Experienced Board: MCY's board of directors are considered experienced (5.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MCY 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

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


Key Information

  • Name: Mercury NZ Limited
  • Ticker: MCY
  • Exchange: NZSE
  • Founded: 1998
  • Industry: Electric Utilities
  • Sector: Utilities
  • Market Cap: NZ$7.100b
  • Shares outstanding: 1.36b
  • Website: https://www.mercury.co.nz

Number of Employees


Location

  • Mercury NZ Limited
  • The Mercury Building
  • 33 Broadway
  • Auckland
  • 1023
  • New Zealand

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MCYNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDMay 2013
MCYASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMay 2013
MRYDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2013
MGHT.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 2013
MCYCHIA (Chi-X Australia)YesOrdinary SharesAUAUDMay 2013

Biography

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, Ret ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/22 10:42
End of Day Share Price2020/10/22 00:00
Earnings2020/06/30
Annual Earnings2020/06/30


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.