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EPS hit an 8-year high in 2007 before dipping with the economy in 2008 and 2009. The recent sale of two rubber product subsidiaries brought in about $10 million in net cash and should set MYE up for improved results in 2010.
Here are Myers’ per share numbers from continuing operations as reported by Value Line:
Year | Sales | C/F | EPS | Div. | Avg. P/E | 52-Wk. Range |
2003 | 19.91 | 1.54 | 0.49 | 0.18 | 19.8x | $8.00 – $12.10 |
2004 | 23.18 | 1.87 | 0.76 | 0.19 | 15.1x | $10.00 – $13.50 |
2005 | 25.96 | 1.80 | 0.76 | 0.20 | 16.6x | $9.20 – $14.80 |
2006 | 22.24 | 1.62 | 0.82 | 0.21 | 19.8x | $14.00 – $18.80 |
2007 | 26.12 | 1.89 | 0.82 | 0.22 | 24.0x | $13.30 – $22.70 |
2008 | 24.63 | 1.68 | 0.53 | 0.24 | 20.6x | $4.80 – $15.10 |
2009* | 20.25 | 1.65 | 0.57 | 0.24 | 14.7x | $2.79 – $11.51 |
* 2009 data includes Value Line estimates for Q4
The company is quite optimistic that this year will show big improvements due to debt reduction, cost cutting and restructuring moves completed during 2009. Consensus views now center on 2010 earnings of $0.75 - $0.80 /share or about 35% above last year’s EPS excluding non-recurring items.
At last week’s closing price of $9.19 the forward multiple is now< 12x the mid-range estimate. That’s the lowest P/E for MYE since 2000. The average multiple was 18.7x over the seven years from 2003 through 2009.
The six-cent quarterly dividend is well covered and provides a nice current yield of 2.61%. That’s the second highest yield in the past 20 years for Myers with the only higher payout coming due to the market meltdown of late 2008 into early 2009.
There were two insider buys by Director Richard Johnston totaling 10,000 shares in mid-November. There have been no insider sales since June of 2009.
It doesn’t seem a stretch to expect a price of at least $11.30 by around year end based on 14.7x projected earnings (the lowest average annual P/E of the past 9 years). That would make for a gain of 22.9% from the current quote and a 25.5% total return including the dividend.
Is that a rational goal? MYE shares have exceeded that target price at their peaks in each of the past eight calendar years. In fact, the absolute lows in 2006 and 2007 were $14.00 and $13.30 respectively.
Summary:
If Myers performs as management and analysts are expecting then their shares should provide at least 20% - 25% total returns over the next twelve months. If the market mood allows for a more normalized P/E, then the expected gains may be quite a bit higher. The 2.61% current yield provides a decent income stream (by today’s standards) while we are waiting. The next ex-dividend date will be in late February.
Disclosure: Author is long MYE shares and short MYE puts.
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