NYSE:MTRN

Stock Analysis Report

Executive Summary

Materion Corporation manufactures and sells advanced engineered materials used in consumer electronics, industrial components, defense, medical, automotive electronics, telecommunications infrastructure, energy, commercial aerospace, science, services, and appliance markets worldwide.

Rewards

Trading at 19.8% below its fair value

Earnings are forecast to grow 49.89% per year

Risk Analysis

Large one-off items impacting financial results

Profit margins (1.3%) are lower than last year (2.7%)



Snowflake Analysis

Flawless balance sheet with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-8.2%

MTRN

-3.8%

US Metals and Mining

-1.2%

US Market


1 Year Return

20.7%

MTRN

8.5%

US Metals and Mining

22.3%

US Market

Return vs Industry: MTRN exceeded the US Metals and Mining industry which returned 17.5% over the past year.

Return vs Market: MTRN underperformed the US Market which returned 23.9% over the past year.


Shareholder returns

MTRNIndustryMarket
7 Day-8.2%-3.8%-1.2%
30 Day-4.9%-5.1%1.6%
90 Day-2.3%4.1%8.8%
1 Year21.6%20.7%11.7%8.5%25.0%22.3%
3 Year47.6%44.1%-1.4%-6.7%49.9%40.3%
5 Year75.4%67.0%32.7%22.4%77.6%58.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

27.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MTRN ($60.73) is trading below our estimate of fair value ($75.76)

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


Price To Earnings Ratio

PE vs Industry: MTRN is poor value based on its PE Ratio (81.9x) compared to the Metals and Mining industry average (11.4x).

PE vs Market: MTRN is poor value based on its PE Ratio (81.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: MTRN is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: MTRN is overvalued based on its PB Ratio (2.1x) compared to the US Metals and Mining industry average (1.6x).


Next Steps

Future Growth

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

49.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MTRN's forecast earnings growth (49.9% per year) is above the savings rate (1.7%).

Earnings vs Market: MTRN's earnings (49.9% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MTRN's revenue (4.7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: MTRN's revenue (4.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MTRN's Return on Equity is forecast to be low in 3 years time (9.4%).


Next Steps

Past Performance

How has Materion performed over the past 5 years?

-13.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MTRN has a large one-off loss of $21.1M impacting its September 27 2019 financial results.

Growing Profit Margin: MTRN's current net profit margins (1.3%) are lower than last year (2.7%).


Past Earnings Growth Analysis

Earnings Trend: MTRN's earnings have declined by -13.2% per year over the past 5 years.

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

Earnings vs Industry: MTRN had negative earnings growth (-54.7%) over the past year, making it difficult to compare to the Metals and Mining industry average (-7.6%).


Return on Equity

High ROE: MTRN's Return on Equity (2.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Materion's financial position?


Financial Position Analysis

Short Term Liabilities: MTRN's short term assets ($475.6M) exceed its short term liabilities ($127.0M).

Long Term Liabilities: MTRN's short term assets ($475.6M) exceed its long term liabilities ($115.1M).


Debt to Equity History and Analysis

Debt Level: MTRN's debt to equity ratio (0.4%) is considered satisfactory.

Reducing Debt: MTRN's debt to equity ratio has reduced from 10.3% to 0.4% over the past 5 years.

Debt Coverage: MTRN's debt is well covered by operating cash flow (3729.2%).

Interest Coverage: MTRN's interest payments on its debt are well covered by EBIT (22.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: MTRN's debt is covered by short term assets (assets are 204.7x debt).


Next Steps

Dividend

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

0.78%

Current Dividend Yield


Dividend Yield vs Market

company0.8%marketbottom25%1.4%markettop25%3.7%industryaverage2.6%forecastin3Years0.8%

Current dividend yield vs market & industry

Notable Dividend: MTRN's dividend (0.72%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: MTRN's dividend (0.72%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: MTRN is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: MTRN is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

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


Future Payout to Shareholders

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


Next Steps

Management

What is the CEO of Materion's salary, the management and board of directors tenure and is there insider trading?

3.0yrs

Average management tenure


CEO

Jugal Vijayvargiya (51yo)

2.8yrs

Tenure

US$4,258,935

Compensation

Mr. Jugal K. Vijayvargiya has been the Chief Executive Officer and President of Materion Corporation since March 03, 2017. Mr. Vijayvargiya had an extensive 26-year international career with Delphi Automot ...


CEO Compensation Analysis

Compensation vs Market: Jugal's total compensation ($USD4.26M) is above average for companies of similar size in the US market ($USD2.52M).

Compensation vs Earnings: Jugal's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

3.0yrs

Average Tenure

56yo

Average Age

Experienced Management: MTRN's management team is considered experienced (3 years average tenure).


Board Age and Tenure

6.9yrs

Average Tenure

62yo

Average Age

Experienced Board: MTRN's board of directors are considered experienced (6.9 years average tenure).


Insider Trading

Insider Buying: MTRN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$281,24717 Jan 20
Craig Shular
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,637.22
Max PriceUS$60.65
SellUS$260,32430 May 19
Craig Shular
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,127
Max PriceUS$63.08
SellUS$122,12515 May 19
Vinod Khilnani
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares1,855
Max PriceUS$65.84
SellUS$6,102,04103 May 19
GAMCO Investors, Inc.
EntityCompany
Shares97,000
Max PriceUS$68.87
SellUS$172,69625 Feb 19
Gregory Chemnitz
EntityIndividual
Role
Chief Legal Officer
VP, General Counsel & Secretary
Shares3,000
Max PriceUS$57.78

Ownership Breakdown

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


Management Team

  • Mike Anderson (67yo)

    President of Beryllium Products

    • Stephen Freeman

      President of International Business Development

      • Tenure: 13.8yrs
    • Greg Chemnitz (61yo)

      VP, General Counsel & Secretary

      • Tenure: 12.3yrs
      • Compensation: US$1.42m
    • Joseph Kelley (46yo)

      CFO & VP of Finance

      • Tenure: 5yrs
      • Compensation: US$2.24m
    • Guido Beyss

      President of Europe

      • Jugal Vijayvargiya (51yo)

        CEO, President & Director

        • Tenure: 2.8yrs
        • Compensation: US$4.26m
      • Ian Tribick

        Chief Technology & Marketing Officer

        • Tenure: 2.4yrs
      • Steve Shamrock

        Vice President of Investor Relations & Corporate Controller

        • Tenure: 3yrs
      • Marc Rands

        Vice President of Global Operations

        • Tenure: 2yrs
      • Deborah Armstrong

        Chief Human Resources Officer


        Board Members

        • Craig Shular (66yo)

          Independent Director

          • Tenure: 11.7yrs
          • Compensation: US$164.87k
        • Bob Phillippy (59yo)

          Independent Director

          • Compensation: US$222.42k
        • Vinod Khilnani (67yo)

          Non-Executive Chairman

          • Tenure: 2yrs
          • Compensation: US$233.33k
        • Bob Toth (58yo)

          Independent Director

          • Tenure: 6.9yrs
          • Compensation: US$165.00k
        • N. Reddy (65yo)

          Independent Director

          • Tenure: 20yrs
          • Compensation: US$165.00k
        • Patrick Prevost (64yo)

          Independent Director

          • Tenure: 0.6yrs
        • Darlene J. Solomon (60yo)

          Independent Director

          • Tenure: 8.5yrs
          • Compensation: US$173.33k
        • Jugal Vijayvargiya (51yo)

          CEO, President & Director

          • Tenure: 2.8yrs
          • Compensation: US$4.26m

        Company Information

        Materion Corporation's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Materion Corporation
        • Ticker: MTRN
        • Exchange: NYSE
        • Founded: 1931
        • Industry: Diversified Metals and Mining
        • Sector: Materials
        • Market Cap: US$1.149b
        • Shares outstanding: 20.40m
        • Website: https://www.materion.com

        Number of Employees


        Location

        • Materion Corporation
        • 6070 Parkland Boulevard
        • Mayfield Heights
        • Ohio
        • 44124
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        MTRNNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1969
        BEMDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1969

        Biography

        Materion Corporation manufactures and sells advanced engineered materials used in consumer electronics, industrial components, defense, medical, automotive electronics, telecommunications infrastructure, energy, commercial aerospace, science, services, and appliance markets worldwide. The company operates in four segments: Performance Alloys and Composites, Advanced Materials, Precision Coatings, and Other. The Performance Alloys and Composites segment provides copper and nickel products in plate, rod, bar, tube, wire product forms, as well as other customized shapes; thick precision strip products; beryllium hydroxide; and beryllium products, such as beryllium and aluminum metal matrix composites, beryllia ceramics, and bulk metallic glass materials. This segment also produces strip metal products with clad inlay and overlay metals consisting of precious and base metals electroplated systems, electron beam welded systems, contour profiled systems, and solder-coated metal systems. The Advanced Materials segment provides advanced chemicals, microelectronics packaging, precious and non-precious metals, and specialty metal products, including vapor deposition targets, frame lid assemblies, clad and precious metal pre-forms, high temperature braze materials, and ultra-fine wires for use in the consumer electronics, industrial components, and telecommunications infrastructure end markets. The Precision Coatings segment produces sputter-coated precision thin film coatings and optical filter materials. Materion Corporation distributes its products through company-owned facilities, and independent distributors and agents. The company was formerly known as Brush Engineered Materials Inc. and changed its name to Materion Corporation in 2011. Materion Corporation was founded in 1931 and is headquartered in Mayfield Heights, Ohio. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/27 23:33
        End of Day Share Price2020/01/27 00:00
        Earnings2019/09/27
        Annual Earnings2018/12/31


        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.