NYSE:MTOR

Stock Analysis Report

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Executive Summary

Meritor, Inc. designs, develops, manufactures, markets, distributes, sells, services, and supports integrated systems, modules, and components to original equipment manufacturers (OEMs) and the aftermarket for the commercial vehicle, transportation, and industrial sectors. More Details


Snowflake Analysis

Undervalued with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: MTOR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: MTOR's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

6.0%

MTOR

1.9%

US Machinery

2.8%

US Market


1 Year Return

6.4%

MTOR

18.2%

US Machinery

19.7%

US Market

Return vs Industry: MTOR underperformed the US Machinery industry which returned 18.2% over the past year.

Return vs Market: MTOR underperformed the US Market which returned 19.7% over the past year.


Shareholder returns

MTORIndustryMarket
7 Day6.0%1.9%2.8%
30 Day4.9%11.3%8.0%
90 Day15.4%16.3%6.8%
1 Year6.4%6.4%21.3%18.2%22.4%19.7%
3 Year8.5%8.5%33.3%23.7%47.3%37.5%
5 Year164.0%164.0%123.7%98.6%93.6%72.3%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

36.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MTOR ($27.06) is trading below our estimate of fair value ($42.77)

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


Price To Earnings Ratio

PE vs Industry: MTOR is good value based on its PE Ratio (8.2x) compared to the US Machinery industry average (29.8x).

PE vs Market: MTOR is good value based on its PE Ratio (8.2x) compared to the US market (19.7x).


Price to Earnings Growth Ratio

PEG Ratio: MTOR is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: MTOR is overvalued based on its PB Ratio (4.2x) compared to the US Machinery industry average (2.8x).


Next Steps

Future Growth

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

16.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MTOR's forecast earnings growth (16% per year) is above the savings rate (2.2%).

Earnings vs Market: MTOR's earnings (16% per year) are forecast to grow slower than the US market (22% per year).

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

Revenue vs Market: MTOR's revenue (10.7% per year) is forecast to grow faster than the US market (10.2% per year).

High Growth Revenue: MTOR's revenue (10.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MTOR's Return on Equity is forecast to be high in 3 years time (36.6%)


Next Steps

Past Performance

How has Meritor performed over the past 5 years?

3.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MTOR has a large one-off gain of $265.0M impacting its September 30 2020 financial results.

Growing Profit Margin: MTOR's current net profit margins (8%) are higher than last year (6.6%).


Past Earnings Growth Analysis

Earnings Trend: MTOR's earnings have grown by 3.7% per year over the past 5 years.

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

Earnings vs Industry: MTOR had negative earnings growth (-15.7%) over the past year, making it difficult to compare to the Machinery industry average (-15.6%).


Return on Equity

High ROE: Whilst MTOR's Return on Equity (50.1%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Meritor's financial position?


Financial Position Analysis

Short Term Liabilities: MTOR's short term assets ($1.3B) exceed its short term liabilities ($726.0M).

Long Term Liabilities: MTOR's short term assets ($1.3B) do not cover its long term liabilities ($1.7B).


Debt to Equity History and Analysis

Debt Level: MTOR's debt to equity ratio (246.7%) is considered high.

Reducing Debt: MTOR had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: MTOR's debt is well covered by operating cash flow (21.7%).

Interest Coverage: MTOR's interest payments on its debt are not well covered by EBIT (1.7x coverage).


Balance Sheet


Next Steps

Dividend

What is Meritor current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate MTOR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate MTOR's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if MTOR's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if MTOR's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: MTOR is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of MTOR's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

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

4.8yrs

Average management tenure


CEO

Jay Craig (60 yo)

5.58yrs

Tenure

US$7,399,117

Compensation

Mr. Jeffrey A. Craig, also known as Jay, has been the Chief Executive Officer of Meritor, Inc. (Formerly known as ArvinMeritor, Inc.) since April 29, 2015 and has been its President since June 9, 2014. Mr....


CEO Compensation Analysis

Compensation vs Market: Jay's total compensation ($USD7.40M) is above average for companies of similar size in the US market ($USD4.15M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Jeffrey Craig
President5.58yrsUS$7.40m0.83%
$ 16.2m
Carl Anderson
Senior VP & CFO1.67yrsUS$1.79m0.023%
$ 447.1k
Chrishan Anthon Villavarayan
Executive VP & COO0.83yrUS$2.53m0.056%
$ 1.1m
Timothy Heffron
Senior VP of HR & Chief Information Officer9.33yrsUS$1.66m0.060%
$ 1.2m
Paul Bialy
VP & Chief Accounting Officer4.92yrsno data0.038%
$ 740.0k
Todd Chirillo
Senior Director of Investor Relationsno datano datano data
Hannah Lim-Johnson
Senior VP0.25yrno datano data
Krista Sohm
VP and Chief Marketing & Communication Officer4.83yrsno datano data
Timothy Earl Bowes
Group VP and President of Industrial & North America Aftermarket0.50yrUS$853.84kno data
Silvio Barros
Managing Director of South America8.5yrsno datano data
N. Thimmaiah
Managing Director of India7.83yrsno datano data
John Nelligan
Group VP & President of North America Truck0.75yrno datano data

4.8yrs

Average Tenure

53yo

Average Age

Experienced Management: MTOR's management team is considered experienced (4.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jeffrey Craig
President5.58yrsUS$7.40m0.83%
$ 16.2m
William Newlin
Independent Non-Executive Chairman4.58yrsUS$374.99k0.30%
$ 5.8m
Lloyd Trotter
Independent Director5.83yrsUS$239.96k0.094%
$ 1.8m
Rhonda Brooks
Independent Director20.33yrsUS$234.99k0.18%
$ 3.6m
Ivor Evans
Independent Director15.5yrsUS$224.99k0.59%
$ 11.5m
Jan Bertsch
Independent Director4.17yrsUS$234.94k0.066%
$ 1.3m
Thomas Pajonas
Independent Director7.17yrsUS$244.99k0.082%
$ 1.6m
Steven Beringhause
Independent Director0.92yrno data0.0079%
$ 154.6k
Fazal Merchant
Director0.17yrno data0.0019%
$ 37.2k
Rodger Boehm
Independent Director2.92yrsUS$234.95k0.039%
$ 759.6k

5.1yrs

Average Tenure

64yo

Average Age

Experienced Board: MTOR's board of directors are considered experienced (5.1 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: MTOR insiders have only sold shares 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

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


Key Information

  • Name: Meritor, Inc.
  • Ticker: MTOR
  • Exchange: NYSE
  • Founded: 1909
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: US$1.957b
  • Shares outstanding: 72.31m
  • Website: https://www.meritor.com

Number of Employees


Location

  • Meritor, Inc.
  • 2135 West Maple Road
  • Troy
  • Michigan
  • 48084
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MTORNYSE (New York Stock Exchange)YesCommon StockUSUSDSep 1997
AID1DB (Deutsche Boerse AG)YesCommon StockDEEURSep 1997

Biography

Meritor, Inc. designs, develops, manufactures, markets, distributes, sells, services, and supports integrated systems, modules, and components to original equipment manufacturers (OEMs) and the aftermarket...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/26 00:37
End of Day Share Price2020/11/25 00:00
Earnings2020/09/30
Annual Earnings2020/09/30


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.