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Methanex (MEOH) Announces a New 5% Share Buyback Program

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Methanex Corporation’s (MEOH - Free Report) board recently approved a Normal Course Issuer Bid (“NCIB”), wherein the company will purchase for cancellation up to 3,810,464 common shares. This represents 5% of the 76,209,280 shares issued and outstanding as of Sep 16, 2021.

Purchases under the NCIB will begin on Sep 24, 2021 and get completed by Sep 23, 2022. Purchases will be made from time to time at the then current market price of the shares and all shares purchased under the NCIB will be cancelled.

Purchases pursuant to the NCIB will be made on the open market through the facilities of the NASDAQ Global Select Market and alternative trading systems in the United States, per Rule 10b-18 under the U.S. Securities Exchange Act of 1934.

The daily repurchases under the plan through the NASDAQ and alternative trading systems in the United States, subject to certain exceptions for block purchases, will not exceed 25% of the company’s average daily trading volume for the four week period before the date of purchase. Methanex entered into an automatic securities purchase plan with its broker related to purchases to be made under the program.

Methanex’s strong financial position and a strong methanol price environment enables it to generate significant cash flow to maintain its business, fund the remaining capital costs for the Geismar 3 project as well as return excess cash to shareholders.

Shares of Methanex have surged 101.3% in the past year compared with a 21.7% rise of the industry.

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Methanex, in its last earnings call, stated that its outlook for the methanol industry is positive, owing to the ongoing favorable industry conditions. Strong methanol demand along with the industry supply challenges continues to drive tight market conditions into the third quarter. New industry supply and the Geismar 3 project are requisites for catering to the methanol demand growth.

The company is optimistic about its Geismar 3 project to strengthen its portfolio and support its future cash generation as well as future shareholder distribution increases. It also anticipates the recent shipping partnership between its subsidiary, Waterfront Shipping, and Mitsui O.S.K. Lines, Ltd. to strengthen financial position.

 

Zacks Rank & Other Key Picks

Methanex currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , The Chemours Company (CC - Free Report) and Olin Corporation (OLN - Free Report) .

Nucor has a projected earnings growth rate of around 534.4% for the current year. The company’s shares have surged 119.7% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected earnings growth rate of around 86.4% for the current year. The company’s shares have gained 39.5% in the past year. It currently flaunts a Zacks Rank #1.

Olin has an expected earnings growth rate of around 639.3% for the current fiscal. The company’s shares have surged 309.8% in the past year. It currently carries a Zacks Rank #2 (Buy).