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5 Reasons to Add Methanex (MEOH) Stock to Your Portfolio
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Methanex Corporation (MEOH - Free Report) stock looks promising at the moment. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical maker an intriguing choice for investors right now.
What’s Working in Favor of MEOH?
Solid Rank & VGM Score: Methanex currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Methanex has outperformed the industry over a year. The company’s shares have rallied around 28% over this period, compared with roughly 25% gain recorded by the industry.
Positive Earnings Surprise History: Methanex has an impressive earnings surprise history. The company has outpaced the Zacks Consensus Estimate in three of the trailing four quarters, delivering a positive average earnings surprise of 50.1%.
Superior Return on Equity (ROE): Methanex’s ROE of 16%, as compared with the industry average of 11.2%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Prospects: Methanex, during its third-quarter earnings call, issued a positive outlook for the fourth quarter. The company expects global methanol prices to improve in the fourth quarter supported by healthy demand. Methanex anticipates production, sales of produced products and EBITDA to be higher in the fourth quarter compared with the third.
Methanex should gain from healthy demand fundamentals for methanol. Demand has been driven by both traditional derivatives and energy-related applications in Asia, particularly in China.
Moreover, the company has completed the relocation of two Chilean plants to the U.S. Gulf Coast at a site in Geismar, LA. The project is expected to create significant value for shareholders and meaningfully contribute to cash generation.
Last month, Methanex and Empresa Nacional del Petroleo (ENAP) entered into a deal for the supply of additional gas for Methanex’s operations in Chile through Dec 31, 2019.
According to Methanex, the company is now fully committed to restart the Chile IV facility, which is targeted for the third-quarter 2018. It also remains optimistic that its underutilized 1.7 million-ton Chile operations represents growth opportunity for the company at a very low capital cost due to the considerable progress in developing natural gas reserves in the area.
Methanex also remains committed to boost shareholder returns leveraging its strong liquidity position. The company returned $109 million in cash to shareholders in the form of dividend in the third quarter.
Kronos has an expected long-term earnings growth of 5%. Its shares are up roughly 114% over a year.
Huntsman has an expected long-term earnings growth of 8%. The stock has gained around 62% over a year.
Air Products has an expected long-term earnings growth of 14.1%. The stock has gained around 14% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
5 Reasons to Add Methanex (MEOH) Stock to Your Portfolio
Methanex Corporation (MEOH - Free Report) stock looks promising at the moment. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical maker an intriguing choice for investors right now.
What’s Working in Favor of MEOH?
Solid Rank & VGM Score: Methanex currently has a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Methanex has outperformed the industry over a year. The company’s shares have rallied around 28% over this period, compared with roughly 25% gain recorded by the industry.
Positive Earnings Surprise History: Methanex has an impressive earnings surprise history. The company has outpaced the Zacks Consensus Estimate in three of the trailing four quarters, delivering a positive average earnings surprise of 50.1%.
Superior Return on Equity (ROE): Methanex’s ROE of 16%, as compared with the industry average of 11.2%, manifests the company’s efficiency in utilizing shareholder’s funds.
Upbeat Prospects: Methanex, during its third-quarter earnings call, issued a positive outlook for the fourth quarter. The company expects global methanol prices to improve in the fourth quarter supported by healthy demand. Methanex anticipates production, sales of produced products and EBITDA to be higher in the fourth quarter compared with the third.
Methanex should gain from healthy demand fundamentals for methanol. Demand has been driven by both traditional derivatives and energy-related applications in Asia, particularly in China.
Moreover, the company has completed the relocation of two Chilean plants to the U.S. Gulf Coast at a site in Geismar, LA. The project is expected to create significant value for shareholders and meaningfully contribute to cash generation.
Last month, Methanex and Empresa Nacional del Petroleo (ENAP) entered into a deal for the supply of additional gas for Methanex’s operations in Chile through Dec 31, 2019.
According to Methanex, the company is now fully committed to restart the Chile IV facility, which is targeted for the third-quarter 2018. It also remains optimistic that its underutilized 1.7 million-ton Chile operations represents growth opportunity for the company at a very low capital cost due to the considerable progress in developing natural gas reserves in the area.
Methanex also remains committed to boost shareholder returns leveraging its strong liquidity position. The company returned $109 million in cash to shareholders in the form of dividend in the third quarter.
Methanex Corporation Price and Consensus
Methanex Corporation Price and Consensus | Methanex Corporation Quote
Other Stocks to Consider
Other stocks worth considering in the basic materials space include Kronos Worldwide, Inc. (KRO - Free Report) , Huntsman Corporation (HUN - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) . While Kronos carries a Zacks Rank #1, both Huntsman and Air Products sport a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kronos has an expected long-term earnings growth of 5%. Its shares are up roughly 114% over a year.
Huntsman has an expected long-term earnings growth of 8%. The stock has gained around 62% over a year.
Air Products has an expected long-term earnings growth of 14.1%. The stock has gained around 14% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>