Q: Still holding MG as it approaches the Covid lows.
My question has to do with the financial health of the company, and is its dividend supported if we finally enter the long awaited slow down/recession. I've scanned past questions and would like to know if your 2025/2026 views of this company have changed. It would also be great to reflect its current valuation over past cyclical downturns.
Thx.
My question has to do with the financial health of the company, and is its dividend supported if we finally enter the long awaited slow down/recession. I've scanned past questions and would like to know if your 2025/2026 views of this company have changed. It would also be great to reflect its current valuation over past cyclical downturns.
Thx.
5i Research Answer:
Based on analysts' consensus, EPS is expected to go from $5.78 last year to $5.42 this year, to $6.28 in 2025. The balance sheet has net debt of $6.4B, and 12-month cash flow was $3.3B. The balance sheet is leveraged, but not really by a worrying amount. Interest expense was $207M last year, not even 10% of cash flow. The dividend was omitted for more than a year in 2009 following the financial crisis. Our views haven't really changed, as the stock is very cheap at 7X earnings. It is at the very low end of its long term average valuation. But safe to say our patience is wearing thin on this one. Still, it has made money every year since 2009.