NasdaqGS:MERC

Stock Analysis Report

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Executive Summary

Mercer International Inc., together with its subsidiaries, manufactures and sells northern bleached softwood kraft (NBSK) pulp in Europe, the United States, Asia, and internationally. More Details


Snowflake Analysis

High growth potential and slightly overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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

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


Market Performance


7 Day Return

14.5%

MERC

0.8%

US Forestry

-4.6%

US Market


1 Year Return

73.5%

MERC

42.4%

US Forestry

38.5%

US Market

Return vs Industry: MERC exceeded the US Forestry industry which returned 40.9% over the past year.

Return vs Market: MERC exceeded the US Market which returned 38.9% over the past year.


Shareholder returns

MERCIndustryMarket
7 Day14.5%0.8%-4.6%
30 Day37.7%19.0%0.6%
90 Day86.5%30.9%1.9%
1 Year81.5%73.5%48.2%42.4%41.5%38.5%
3 Year33.5%18.2%21.0%9.8%56.7%46.7%
5 Year114.1%73.1%71.4%49.8%123.5%98.6%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

22.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MERC ($15.37) is trading below our estimate of fair value ($19.73)

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


Price To Earnings Ratio

PE vs Industry: MERC is unprofitable, so we can't compare its PE Ratio to the US Forestry industry average.

PE vs Market: MERC is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MERC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MERC is overvalued based on its PB Ratio (1.7x) compared to the US Forestry industry average (1.3x).


Next Steps

Future Growth

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

109.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MERC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2%).

Earnings vs Market: MERC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: MERC's is expected to become profitable in the next 3 years.

Revenue vs Market: MERC's revenue (11.1% per year) is forecast to grow faster than the US market (10.4% per year).

High Growth Revenue: MERC's revenue (11.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MERC's Return on Equity is forecast to be high in 3 years time (29.4%)


Next Steps

Past Performance

How has Mercer International performed over the past 5 years?

-21.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MERC is currently unprofitable.

Growing Profit Margin: MERC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MERC is unprofitable, and losses have increased over the past 5 years at a rate of 21.1% per year.

Accelerating Growth: Unable to compare MERC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MERC is unprofitable, making it difficult to compare its past year earnings growth to the Forestry industry (29.7%).


Return on Equity

High ROE: MERC has a negative Return on Equity (-2.87%), as it is currently unprofitable.


Next Steps

Financial Health

How is Mercer International's financial position?


Financial Position Analysis

Short Term Liabilities: MERC's short term assets ($874.9M) exceed its short term liabilities ($211.8M).

Long Term Liabilities: MERC's short term assets ($874.9M) do not cover its long term liabilities ($1.3B).


Debt to Equity History and Analysis

Debt Level: MERC's debt to equity ratio (190.6%) is considered high.

Reducing Debt: MERC's debt to equity ratio has increased from 170.4% to 190.6% over the past 5 years.

Debt Coverage: MERC's debt is not well covered by operating cash flow (3.6%).

Interest Coverage: MERC is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet


Next Steps

Dividend

What is Mercer International current dividend yield, its reliability and sustainability?

1.69%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: MERC's dividend (1.69%) is higher than the bottom 25% of dividend payers in the US market (1.35%).

High Dividend: MERC's dividend (1.69%) is low compared to the top 25% of dividend payers in the US market (3.72%).


Stability and Growth of Payments

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

Growing Dividend: MERC has only been paying a dividend for 6 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: MERC is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: MERC's dividends in 3 years are forecast to be well covered by earnings (31.6% payout ratio).


Next Steps

Management

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

4.8yrs

Average management tenure


CEO

David Gandossi (62 yo)

5.58yrs

Tenure

US$1,928,100

Compensation

Mr. David M. Gandossi, FCPA, FCA, has been the Chief Executive Officer, President and Director at Mercer International Inc. since July 20, 2015. Mr. Gandossi served as the Chief Financial Officer, Executiv...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD1.93M) is about average for companies of similar size in the US market ($USD2.22M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Jimmy S. Lee
Executive Chairman5.58yrsUS$1.90m2.86%
$ 26.6m
David Gandossi
President5.58yrsUS$1.93m0.29%
$ 2.7m
David Ure
Executive VP5.58yrsUS$904.06k0.097%
$ 896.0k
Adolf Koppensteiner
Chief Operating Officer3.08yrsUS$883.52k0.044%
$ 406.7k
Christoph Grewe-Franze
Chief Information Officer1.25yrsno datano data
Brian Merwin
Vice President of Corporate Development2yrsno data0.075%
$ 694.0k
Leonhard Nossol
Co-Managing Director of Mercer Rosenthal & Group Controller for Europe24.08yrsUS$603.36k0.12%
$ 1.1m
Genevieve Stannus
VP & Treasurer15.58yrsno data0.056%
$ 517.6k
Richard Short
VP & Controller14.08yrsno data0.060%
$ 555.2k
André Listemann
Managing Director of Mercer Stendal1.67yrsno datano data
Carsten Merforth
Managing Director of Mercer Timber Productsno datano datano data
Uwe Bentlage
VP of Pulp Sales & Marketing for Europe & MD of Mercer Pulp Sales GmbH4.08yrsno datano data

4.8yrs

Average Tenure

56yo

Average Age

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


Board Members

NamePositionTenureCompensationOwnership
Jimmy S. Lee
Executive Chairman5.58yrsUS$1.90m2.86%
$ 26.6m
David Gandossi
President5.58yrsUS$1.93m0.29%
$ 2.7m
Alan Wallace
Independent Director2.67yrsUS$130.00k0.031%
$ 285.2k
Alice Laberge
Directorno datano datano data
Linda Welty
Independent Director2.67yrsUS$130.00k0.031%
$ 285.2k
William McCartney
Independent Director18.08yrsUS$150.00k0.13%
$ 1.2m
R. Purchase
Independent Lead Director2.67yrsUS$220.02k0.099%
$ 921.7k
James Shepherd
Independent Director9.67yrsUS$150.00k0.071%
$ 660.9k
Janine North
Directorno datano datano data
Rainer Rettig
Independent Director1yrno data0.017%
$ 157.3k

4.1yrs

Average Tenure

63yo

Average Age

Experienced Board: MERC's board of directors are considered experienced (4.1 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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

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


Key Information

  • Name: Mercer International Inc.
  • Ticker: MERC
  • Exchange: NasdaqGS
  • Founded: 1968
  • Industry: Paper Products
  • Sector: Materials
  • Market Cap: US$927.779m
  • Shares outstanding: 65.80m
  • Website: https://www.mercerint.com

Number of Employees


Location

  • Mercer International Inc.
  • 700 West Pender Street
  • Suite 1120
  • Vancouver
  • British Columbia
  • V6C 1G8
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MERCNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJul 1988
AEZDB (Deutsche Boerse AG)YesCommon StockDEEURJul 1988

Biography

Mercer International Inc., together with its subsidiaries, manufactures and sells northern bleached softwood kraft (NBSK) pulp in Europe, the United States, Asia, and internationally. It operates through t...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/02/26 23:10
End of Day Share Price2021/02/26 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.