Methanex (TSX: MX) has long been known as one of those stable stocks that really any investor should feel comfortable owning. Because of this Methanex stock has also become known as a stable dividend provider, currently with a 1.54% dividend yield.
However, earnings are due out on April 25. So let’s look at what investors should dive into if they’re considering Methanex stock on the TSX today.
About Methanex
Methanex is the world’s largest producer and supplier of methanol. Methanex was founded in 1968 in Canada. Initially, it was a subsidiary of Canadian petrochemical company Westcoast Transmission Co. Ltd. In 1992, Methanex became an independent company through a management buyout.
Now, Methanex stock primarily produces and markets methanol, a versatile chemical building block used in numerous industrial applications, including the production of formaldehyde, acetic acid, and various plastics. Methanol is also used as a fuel additive and in the production of renewable fuels.
Given its essential use, Methanex stock expanded and operates production facilities in several countries, including Canada, the United States, Chile, New Zealand, and Trinidad and Tobago. These facilities are strategically located near sources of natural gas, which is the primary feedstock for methanol production.
Beyond earnings
Despite this, shares haven’t been performing so great over the last year. And to figure out why, let’s look at how Methanex stock has performed through its earnings. That way we can tell if there has been momentum, positively or negatively.
For the second quarter, net income came in at $57 million, with revenue at $939 million. Production hit 1.658 million tonnes. By the third quarter, net income plunged to $24 million, with revenue down to $823 million, and production at 1.545 million tonnes.
Methanex stock managed to improve by the fourth quarter, but still not back to earlier levels. Net income came in at just $33 million, with revenue at $922 million. Both lower than second quarter levels. Yet production improved, hitting 1.779 million tonnes. The year also saw improvements year over year, with 6.642 million tonnes produced. However, revenue was down year-over-year at $3.723 billion compared to $4.311 billion in 2022, and nearly half the net income at $174 million.
What to watch
The company needs sales. Production is up, and that’s fantastic. But it doesn’t mean anything if Methanex stock can’t sell the products. Production for 2024 now looks like it could be higher than 2023 results. And again, great, but it needs to sell that product.
So now, when looking at Methanex stock and its results, consider looking beyond production. Granted, that must be up as well. And should be with its G3 project up and running. However, there needs to also be an overall improvement in revenue and net income. What’s more, hopefully there will be more results from management stating how the company believes it will perform in 2024. And how it expects to grow its revenue in the year to come, or not.
