Fact based stock research
Meridian Energy (NZSE:MEL)

NZMELE0002S7

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Meridian Energy stock research in summary

meridianenergy.co.nz


ANALYSIS: With an Obermatt Combined Rank of 13 (worse than 87% compared with investment alternatives), Meridian Energy (Renewable Electricity, New Zealand) shares have lower financial characteristics compared with similar stocks. Shares of Meridian Energy are low in value (priced high) with a consolidated Value Rank of 9 (worse than 91% of alternatives) and show below-average growth (Growth Rank of 15) but are safely financed (Safety Rank of 67), which means low debt burdens. ...read more


RECOMMENDATION: A Combined Rank of 13, is a sell recommendation based on Meridian Energy's financial characteristics. As the company Meridian Energy's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 9) and low growth (Obermatt Growth Rank of 15), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 67) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more


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Country New Zealand
Industry Renewable Electricity
Index SDG 13, SDG 15, SDG 5, SDG 7, NZSX 50
Size class Large

This stock has achievements: Top 10 Stock.

21-Mar-2024. Stock data may be delayed. Log in or sign up to get the most recent research.




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Research History: Meridian Energy

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
SENTIMENT
SENTIMENT
360° VIEW
360° VIEW

Most recent update of the stock research: 21-Mar-2024. Financial reporting date used for calculating ranks: 30-Jun-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Meridian Energy is in the corresponding investment strategy.
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Combined financial peformance in Detail

ANALYSIS: With an Obermatt Combined Rank of 13 (worse than 87% compared with investment alternatives), Meridian Energy (Renewable Electricity, New Zealand) shares have lower financial characteristics compared with similar stocks. Shares of Meridian Energy are low in value (priced high) with a consolidated Value Rank of 9 (worse than 91% of alternatives) and show below-average growth (Growth Rank of 15) but are safely financed (Safety Rank of 67), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 13, is a sell recommendation based on Meridian Energy's financial characteristics. As the company Meridian Energy's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 9) and low growth (Obermatt Growth Rank of 15), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 67) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
COMBINED
COMBINED

Last update of combined financial performance: 21-Mar-2024. Stock analysis on combined financial performance: The higher the rank of Meridian Energy the better the performance.


Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 9 (worse than 91% compared with alternatives), Meridian Energy shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Meridian Energy. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 53% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 12 which means that the stock price compared with what market professionals expect for future profits is higher than 88% of comparable companies, indicating a low value concerning Meridian Energy's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 5 which means that the stock price compared with what market professionals expect for future profit levels is higher than 95% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 16 is also low. Compared with invested capital, the stock price is higher than for 84% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 9, is a sell recommendation based on Meridian Energy's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Meridian Energy? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Meridian Energy only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more


VALUE METRICS 2021 2022 2023 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)
DIVIDEND YIELD
DIVIDEND YIELD
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE

Last update of Value Rank: 21-Mar-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Meridian Energy; except for dividend yield where the rank is higher, the higher the yield.


Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), Meridian Energy shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Meridian Energy. Sales Growth has a below market rank of 42, which means that, currently, professionals expect the company to grow less than 58% of its competitors. The same is valid for Capital Growth, with a rank of 9, and Profit Growth, with a rank of 48. Currently, professionals expect the company to grow its profits less than 52% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 51, which means that the stock returns have recently been above 51% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Meridian Energy, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS 2021 2022 2023 2024
REVENUE GROWTH
REVENUE GROWTH
PROFIT GROWTH
PROFIT GROWTH
CAPITAL GROWTH
CAPITAL GROWTH
STOCK RETURNS
STOCK RETURNS
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH

Last update of Growth Rank: 21-Mar-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Meridian Energy.


Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 67 (better than 67% compared with alternatives), the company Meridian Energy has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Meridian Energy is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Meridian Energy and the other two below average. Leverage is at a rank of 81 meaning the company has a below-average debt-to-equity ratio. It has less debt than 81% of its competitors.Refinancing is at a rank of 33, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 67% of its competitors. Liquidity is at a rank of 38, meaning that the company generates less profit to service its debt than 62% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 67 (better than 67% compared with alternatives), Meridian Energy has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Meridian Energy are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Meridian Energy and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS 2021 2022 2023 2024
LEVERAGE
LEVERAGE
REFINANCING
REFINANCING
LIQUIDITY
LIQUIDITY
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY

Last update of Safety Rank: 21-Mar-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Meridian Energy and the more cash is available to service its debt.


Sentiment Metrics in Detail

SENTIMENT 2021 2022 2023 2024
ANALYST OPINIONS
ANALYST OPINIONS
OPINIONS CHANGE
OPINIONS CHANGE
PRO HOLDINGS
PRO HOLDINGS
MARKET PULSE
MARKET PULSE
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT

Last update of Sentiment Rank: 21-Mar-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Meridian Energy.
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Stock analysis by the purely fact based Obermatt Method for Meridian Energy from March 21, 2024.

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