NYSE:MEI

Stock Analysis Report

Methode Electronics

Executive Summary

Methode Electronics, Inc. designs, manufactures, and markets component and subsystem devices worldwide.

Rewards

Trading at 34.1% below its fair value

Earnings are forecast to grow 14% per year

Earnings grew by 59.4% over the past year

Risk Analysis

Highly volatile share price over past 3 months



Snowflake Analysis

Undervalued with excellent balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: MEI's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.3%

MEI

-2.3%

US Electronic

-1.2%

US Market


1 Year Return

52.2%

MEI

20.3%

US Electronic

15.5%

US Market

Return vs Industry: MEI exceeded the US Electronic industry which returned 20.3% over the past year.

Return vs Market: MEI exceeded the US Market which returned 15.5% over the past year.


Shareholder returns

MEIIndustryMarket
7 Day1.3%-2.3%-1.2%
30 Day2.5%-1.6%1.4%
90 Day11.5%8.4%4.7%
1 Year54.6%52.2%21.6%20.3%18.0%15.5%
3 Year-7.3%-10.5%43.0%39.0%44.8%35.4%
5 Year13.2%6.8%79.3%70.5%67.3%48.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

34.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MEI ($38.07) is trading below our estimate of fair value ($57.73)

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


Price To Earnings Ratio

PE vs Industry: MEI is good value based on its PE Ratio (14.8x) compared to the Electronic industry average (20.7x).

PE vs Market: MEI is good value based on its PE Ratio (14.8x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: MEI is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: MEI is good value based on its PB Ratio (2x) compared to the US Electronic industry average (2x).


Next Steps

Future Growth

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

14.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MEI's forecast earnings growth (14% per year) is above the savings rate (1.7%).

Earnings vs Market: MEI's earnings (14% per year) are forecast to grow slower than the US market (14.2% per year).

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

Revenue vs Market: MEI's revenue (4.2% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: MEI's revenue (4.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MEI's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Methode Electronics performed over the past 5 years?

-7.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MEI has high quality earnings.

Growing Profit Margin: MEI's current net profit margins (9.2%) are higher than last year (6.5%).


Past Earnings Growth Analysis

Earnings Trend: MEI's earnings have declined by -7.8% per year over the past 5 years.

Accelerating Growth: MEI's earnings growth over the past year (59.4%) exceeds its 5-year average (-7.8% per year).

Earnings vs Industry: MEI earnings growth over the past year (59.4%) exceeded the Electronic industry 53.7%.


Return on Equity

High ROE: MEI's Return on Equity (13.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Methode Electronics's financial position?


Financial Position Analysis

Short Term Liabilities: MEI's short term assets ($461.3M) exceed its short term liabilities ($180.8M).

Long Term Liabilities: MEI's short term assets ($461.3M) exceed its long term liabilities ($373.8M).


Debt to Equity History and Analysis

Debt Level: MEI's debt to equity ratio (39.6%) is considered satisfactory.

Reducing Debt: MEI's debt to equity ratio has increased from 9.5% to 39.6% over the past 5 years.

Debt Coverage: MEI's debt is well covered by operating cash flow (35.7%).

Interest Coverage: MEI's interest payments on its debt are well covered by EBIT (12.9x coverage).


Balance Sheet

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

Debt Coverage by Assets: MEI's debt is covered by short term assets (assets are 1.6x debt).


Next Steps

Dividend

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

1.16%

Current Dividend Yield


Dividend Yield vs Market

company1.2%marketbottom25%1.4%markettop25%3.7%industryaverage1.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: MEI's dividend (1.16%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: MEI's dividend (1.16%) is low compared to the top 25% of dividend payers in the US market (3.71%).


Stability and Growth of Payments

Stable Dividend: MEI's dividends per share have been stable in the past 10 years.

Growing Dividend: MEI's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (17.1%), MEI's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

Donald Duda (64yo)

15.6yrs

Tenure

US$1,389,578

Compensation

Mr. Donald W. Duda, also known as Don, has been the Chief Executive Officer of Methode Electronics, Inc. since May 1, 2004 and its President since February 2001. Mr. Duda served as Vice President of Interc ...


CEO Compensation Analysis

Compensation vs Market: Donald's total compensation ($USD1.39M) is below average for companies of similar size in the US market ($USD3.87M).

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


Management Age and Tenure

1.8yrs

Average Tenure

55yo

Average Age

Experienced Management: MEI's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

4.5yrs

Average Tenure

66.5yo

Average Age

Experienced Board: MEI's board of directors are considered experienced (4.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$28,41806 Sep 19
Bruce Crowther
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares900
Max PriceUS$31.58
BuyUS$27,51028 Mar 19
Amit Patel
EntityIndividual
Shares1,000
Max PriceUS$27.51
BuyUS$60828 Mar 19
Amit Patel
EntityIndividual
Shares21
Max PriceUS$28.93
BuyUS$143,26002 Jan 19
Ronald Tsoumas
EntityIndividual
Role
Chief Financial Officer
VP of Corporate Finance & CFO
Shares5,735
Max PriceUS$24.98
BuyUS$181,71226 Dec 18
Christopher Hornung
EntityIndividual
Shares8,200
Max PriceUS$22.16
SellUS$23,16020 Dec 18
Lawrence Skatoff
EntityIndividual
Role
Vice Chairman
Independent Vice Chairman of the Board
Shares1,000
Max PriceUS$23.16
BuyUS$1,685,47412 Dec 18
Donald Duda
EntityIndividual
Role
Chief Executive Officer
President
Shares70,848
Max PriceUS$23.79

Ownership Breakdown

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


Management Team

  • Donald Duda (64yo)

    President

    • Tenure: 15.6yrs
    • Compensation: US$1.39m
  • Timothy Glandon (55yo)

    Vice President

    • Tenure: 13.3yrs
    • Compensation: US$326.46k
  • Ron Tsoumas (58yo)

    VP of Corporate Finance & CFO

    • Tenure: 1.8yrs
    • Compensation: US$489.03k
  • Kristine Walczak

    Vice President of Corporate Communications

    • Tenure: 0yrs
  • Joseph Khoury (55yo)

    Chief Operating Officer

    • Tenure: 1.4yrs
    • Compensation: US$645.52k
  • Andrea Barry (56yo)

    Chief Human Resources Officer

    • Tenure: 1.8yrs
    • Compensation: US$1.41m
  • Anil Shetty (53yo)

    VP & President of Dabir Surfaces

    • Tenure: 1.3yrs
    • Compensation: US$838.50k
  • Michael Brotherton (42yo)

    VP & President of Grakon Parent

    • Tenure: 1.3yrs
    • Compensation: US$817.18k

Board Members

  • Lawrence Skatoff (79yo)

    Independent Vice Chairman of the Board

    • Tenure: 0.3yrs
    • Compensation: US$194.25k
  • Bruce Crowther (67yo)

    Independent Director

    • Tenure: 0.5yrs
  • Donald Duda (64yo)

    President

    • Tenure: 15.6yrs
    • Compensation: US$1.39m
  • Bud Aspatore (76yo)

    Independent Chairman of the Board

    • Tenure: 7.3yrs
    • Compensation: US$235.25k
  • Mark Schwabero (66yo)

    Independent Director

    • Tenure: 0.5yrs
  • Isabelle Goossen (67yo)

    Independent Director

    • Tenure: 15.5yrs
    • Compensation: US$224.25k
  • Darren Dawson (56yo)

    Independent Director

    • Tenure: 15.5yrs
    • Compensation: US$206.25k
  • Brian Cadwallader (60yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$191.25k

Company Information

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


Key Information

  • Name: Methode Electronics, Inc.
  • Ticker: MEI
  • Exchange: NYSE
  • Founded: 1946
  • Industry: Electronic Manufacturing Services
  • Sector: Tech
  • Market Cap: US$1.341b
  • Shares outstanding: 37.09m
  • Website: https://www.methode.com

Number of Employees


Location

  • Methode Electronics, Inc.
  • 8750 West Bryn Mawr Avenue
  • Suite 1000
  • Chicago
  • Illinois
  • 60631
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MEINYSE (New York Stock Exchange)YesCommon SharesUSUSDSep 1982
ME5ADB (Deutsche Boerse AG)YesCommon SharesDEEURSep 1982

Biography

Methode Electronics, Inc. designs, manufactures, and markets component and subsystem devices worldwide. It operates through Automotive, Industrial, Interface, and Medical segments. The Automotive segment s ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/05 23:42
End of Day Share Price2019/12/05 00:00
Earnings2019/07/27
Annual Earnings2019/04/27


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.