McDermott Stock Analysis, Valuation (NYSE:MDR)

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$6.05 $0.12 (1.94%) MDR stock closing price Apr 20, 2018 (Closing)
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McDermott
Updated on : Apr 20, 2018
previous close
MDR 6.1 (0%)
S&P 500 2670.1 (0%)
Closing Price On: Apr 20, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Oil Field Machines and equipment
Sector :
Oils-Energy
5 Quarter Revenue
Revenue Growth
2017-Q4
$million
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
-3.9%
Operating Profit
Operating Margin:
10.9%
Sector Average:
5.8%
5 Quarter Net Profit
Net Margins
2017-Q4
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
537M
Debt/Equity Ratio:
 0.3
Compared to the industry
Cash Flow
Operating cash flow:
$0.3M
Net Income:
$25.5M
PROS      CONS
Operating Margins
Net Margins
Low Debt Burden
ROIC
ROE
FCF Margin
Recent Growth
Long Term Growth
Cash Flow
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
MDR PS :
0.6
Industry PS :
1.7
Sector:   Oils-Energy.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
11.8%
Return on Equity:
10.6%
Free Cash Flow Margin:
4.9%
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McDermott Stock Analysis

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View the McDermott stock analysis video on Amigobulls. Our analyst opinion covering the buy and sell arguments for MDR stock is shown in the video.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

McDermott International Stock Rating 3.8/5

Amigobulls MDR stock analysis uses latest quarter 2017 Q4 financial data like McDermott revenue growth, profit margins and cash flows. McDermott valuation analysis is based on relative valuation multiples like PE ratio and price to sales ratio. Our McDermott stock rating is based on company's fundamentals like balance sheet risk and cash flow position.

Should you buy MDR stock?

  • McDermott's average operating margin of 10.9% was exceptional.
  • Net margins stood at a healthy 6% (average) for McDermott in the Trailing Twelve Months.
  • With its debt/equity ratio of  0.3, McDermott has a lower debt burden when compared to the Oils-Energy average.
  • The McDermott stock currently trades at a price to earnings ratio of 9.5. We rate this as a positive, compared to the industry average of 24.1.
  • MDR stock is trading at a favorable price to sales multiple of 0.6 as against the Oil Field Machines and equipment industry average multiple of 1.7.
  • McDermott's return on invested capital of 11.8% is good.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for McDermott at 10.6%.
  • The company has a healthy free cash flow margin of 4.9%.

Should you sell MDR stock?

  • 2017 Q4 revenue growth of 11.9% YoY was meagre.
  • The company saw an average annual sales decline of -3.9% in sales over the last 5 years.
  • Cash flow from operations is 0 times net income which is a negative signal.

Comments on this video and McDermott stock

Amigobulls McDermott stock analysis helps investors in understanding how the company's fundamentals have performed in the last few quarters. Fundamental analysis of a company is the most often used approach to find the intrinsic value of a stock.

McDermott revenue growth is an indicator of the demand for a company's products while profit margin is indicative of company's pricing power and pricing strategy. Technical analysis comes in handy to check whether the market sentiment is in line with the fundamental picture of the company.