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MTY Food Group Inc demonstrates fast growth

02.03.2017 • About MTY Food Group Inc ($MTY) • By InTwits

Pay attention to MTY Food Group Inc as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story

MTY Food Group Inc showed growth in the last financial year. The company's revenue surged on 35.2% in FY2016. In addition to revenue MTY Food Group Inc also keeps delivering EBITDA growth. It was 39.6% in FY2016

In the longer period the company showed fast revenue growth of 24.7% from FY2013 to FY2016 annually. EBITDA surged on 21.7% from FY2013 to FY2016 annually.

MTY Food Group Inc ($MTY) financials for the last 5 years

mln. CAD FY2012 FY2013 FY2014 FY2015 FY2016
Revenue growth, %5.3%13.6%26.1%35.2%
SG&A, %
EBITDA growth, %12.3%8.7%18.8%39.6%
EBITDA margin, %36.3%38.7%37.0%34.9%36.0%
Net Income2226252657
Net Income margin, % 22.9%25.4%21.9%17.9%29.2%
CAPEX/Revenue, %1.10%0.827%0.530%2.36%1.42%
Net Debt/EBITDA-0.7x0.3x0.4x-0.4x3.1x
ROIC, %27.5%24.5%20.9%22.3%12.6%
ROE, %22.8%22.1%18.6%16.7%23.9%

Profitability and return on investment

EBITDA growth was partly attributed to margin expansion. EBITDA margin increased slightly on 1.10 pp from 34.9% to 36% in FY2016. In the last 3 years the company's EBITDA margin decreased on 2.70 pp from 38.7% in FY2013 to 36% in FY2016.

We call MTY Food Group Inc an attractive growth stock as together with the growth it delivers high ROIC at 12.6%. During the last three years it dropped - it was 24.5% in FY2013. It's average level of ROIC for the last three years was 18.6%.

Net Income margin surged on 11.3 pp from 17.9% to 29.2% in FY2016. In the last 3 years the company's Net Income margin surged on 3.80 pp from 25.4% in FY2013 to 29.2% in FY2016.

MTY Food Group Inc operates at ROE of 23.9%. It's average level of ROE for the last three years was 19.8%.

Capital expenditures (CAPEX)

In FY2016 the company had CAPEX/Revenue of 1.42%. MTY Food Group Inc showed fast CAPEX/Revenue growth of 0.593 pp from 0.827% in FY2013 to 1.42% in FY2016. For the last three years the average CAPEX/Revenue was 1.44%.

Leverage (Debt)

Having such a fast growth profile MTY Food Group Inc keeps medium debt level at 3.1x Net Debt/EBITDA. In the longer period the company showed fast leverage growth of 2.74x from 0.33x in FY2013 to 3.07x in FY2016.

Valuation vs. comparable companies

The company trades at 18.3x EV/EBITDA which is 17% lower than 22.1x Consumer, Cyclical industry avearge calculated based on 111 companies. At the end of trading day today MTY Food Group Inc traded at 18.8x P/E which is 54.2% lower than 41.1x Consumer, Cyclical peer group avearge calculated on the basis of 25 companies.

Peers in Consumer, Cyclical

Below you can find MTY Food Group Inc benchmarking vs. other companies in Consumer, Cyclical industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Poydras Gaming Finance Corp ($PYD)539.9%
Restaurant Brands International Inc ($QSR)4.6%238.0%2.3%
DHX Media Ltd ($DHX.A)33.9%19.4%127.4%15.4%
Amaya Inc ($AYA)311.5%85.2%254.0%113.8%
NYX Gaming Group Ltd ($NYX)65.2%52.8%45.8%91.8%
Median (71 companies)5.9%4.9%7.0%6.1%4.8%
MTY Food Group Inc ($MTY)5.3%13.6%26.1%35.2%

Top companies by Gross margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
NYX Gaming Group Ltd ($NYX)91.3%86.7%88.3%85.6%
Imvescor Restaurant Group Inc ($IRG)94.2%89.7%84.9%84.3%79.9%
DEQ Systems Corp ($DEQ)77.5%78.4%84.7%82.7%
Second Cup Ltd/The ($SCU)86.6%85.1%72.7%81.1%
New Look Vision Group Inc ($BCI)71.8%72.6%72.6%78.7%
Median (62 companies)37.0%36.1%36.2%33.7%38.3%

Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Westshore Terminals Investment Corp ($WTE)49.7%65.9%60.9%59.6%
Gamehost Inc ($GH)46.1%45.7%45.9%42.8%
Great Canadian Gaming Corp ($GC)16.8%41.1%40.1%36.6%
Imvescor Restaurant Group Inc ($IRG)27.9%27.3%25.5%35.9%31.7%
Whistler Blackcomb Holdings Inc ($WB)36.0%35.9%36.4%35.4%
Median (66 companies)7.9%9.8%10.1%9.0%10.4%
MTY Food Group Inc ($MTY)36.3%38.7%37.0%34.9%36.0%

Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Holloway Lodging Corp ($HLC)8.2%6.7%14.8%26.7%
WestJet Airlines Ltd ($WJA)7.9%19.5%18.6%22.5%22.4%
Westshore Terminals Investment Corp ($WTE)25.7%11.5%6.2%21.2%
Exchange Income Corp ($EIF)7.9%15.8%15.5%15.4%29.7%
Chorus Aviation Inc ($CHR.A)9.9%9.6%3.9%15.0%34.2%
Median (71 companies)2.7%2.8%2.5%2.7%3.4%
MTY Food Group Inc ($MTY)1.1%0.8%0.5%2.4%1.4%

Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Partner Jet Corp ($PJT)-51.6%-50.8%85.1%51.1%
Westshore Terminals Investment Corp ($WTE)24.0%37.8%35.0%38.3%
BRP Inc/CA ($DOO)29.8%26.8%32.3%35.3%26.6%
Cara Operations Ltd ($CAO)24.7%35.1%
Jean Coutu Group PJC Inc/The ($PJC.A)34.4%29.8%29.2%30.2%27.3%
Median (71 companies)9.6%9.7%9.6%8.5%10.5%
MTY Food Group Inc ($MTY)27.5%24.5%20.9%22.3%12.6%

Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Poydras Gaming Finance Corp ($PYD)39.7x
Mountain China Resorts Holding Ltd ($MCG)317.1x29.0x
Rainmaker Entertainment Inc ($RNK)18.6x
Holloway Lodging Corp ($HLC)5.8x8.4x17.1x
Discovery Air Inc ($DA.A)2.8x3.8x7.5x11.4x7.9x
Median (56 companies)1.4x1.8x2.1x2.2x1.8x
MTY Food Group Inc ($MTY)-0.7x0.3x0.4x-0.4x3.1x