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Monadelphous Group Ltd MND

Morningstar Rating
A$13.17 −0.55 (4.01%)
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Company Report

New and Extended Contract Awards Rise Sharply

The massive scale and complexity of the mining and energy construction projects undertaken in the past decade generated a robust tendering pipeline, with numerous medium- to large-scale contracts available based on price, capability, reputation, and reliability. This facilitated Monadelphous developing into a major provider of engineering construction and maintenance services in the domestic iron ore, energy, and coal markets. Each year, the company has taken on larger engineering construction projects, mainly competing for AUD 5 million-AUD 100 million contracts typically lasting one to two years, but now tendering for midsize to large projects valued at more than AUD 100 million. Engineering construction contracts undertaken are traditionally 66% schedule-of-rates-based and 34% fixed-price schedule, which allows the company to balance risk and margins. Monadelphous predominantly tenders for industrial maintenance contracts in the AUD 10 million-50 million per year range, with contract duration of two to three years. The maintenance contract work is undertaken on a rates-reimbursable basis, with a high level of renewal because of the implicit switching costs for customers.

Price vs Fair Value

MND is trading at a 8% discount.
Price
A$13.17
Fair Value
A$81.44
Uncertainty
High
1-Star Price
A$13.54
5-Star Price
A$5.36
Economic Moat
Bpnzb
Capital Allocation
Nlbwdmb

Bulls Say, Bears Say

Bulls

Monadelphous has established an excellent reputation for execution and delivery of structural, mechanical, and electrical work on completed projects.

Bears

Monadelphous is ultimately dependent on the commodities and energy investment cycle and global demand.

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Trading Information

Previous Close Price
A$13.72
Day Range
A$13.1413.57
52-Week Range
A$11.3915.25
Bid/Ask
A$13.11 / A$13.72
Market Cap
A$1.28 Bil
Volume/Avg
179,317 / 285,506

Key Statistics

Price/Earnings (Normalized)
20.68
Price/Sales
0.71
Dividend Yield (Trailing)
3.80%
Dividend Yield (Forward)
3.80%
Total Yield
3.80%

Company Profile

Monadelphous is an engineering company providing construction, maintenance, and industrial services to the mining, energy, and infrastructure sectors. The engineering construction division provides electrical, mechanical, instrumentation, and piping services to the mining and energy sector. The maintenance and industrial services division specializes in the operation and management of mechanical and electrical maintenance services at infrastructure and resource facilities.
Sector
Industrials
Industry
Engineering & Construction
Stock Style Box
Small Core
Total Number of Employees
7,977

Competitors

Valuation

Metric
MND
WOR
VNT
Price/Earnings (Normalized)
20.6823.9716.24
Price/Book Value
2.841.585.49
Price/Sales
0.710.720.56
Price/Cash Flow
6.4214.4610.32
Price/Earnings
MND
WOR
VNT

Financial Strength

Metric
MND
WOR
VNT
Quick Ratio
1.711.180.96
Current Ratio
1.741.271.05
Interest Coverage
21.594.145.75
Quick Ratio
MND
WOR
VNT

Profitability

Metric
MND
WOR
VNT
Return on Assets (Normalized)
6.44%3.68%6.59%
Return on Equity (Normalized)
11.67%6.95%35.45%
Return on Invested Capital (Normalized)
9.18%5.90%16.01%
Return on Assets
MND
WOR
VNT
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