Methanex: Ignore The Short-Term Noise, Grab A Long-Term Bargain

Summary

• Methanex boosted their dividends significantly during 2022 whilst also conducting large share buybacks.
• Despite this wave of cash, their share price suffered during recent months on the back of recession fears.
• Notwithstanding these concerns, methanol prices held up quite well and thus their strong cash flow performance from 2021 continued during the first half of 2022.
• When looking past this short-term noise, their medium to long-term outlook is solid with growth in methanol demand until at least 2030.
• In my eyes, this is a chance to grab a long-term bargain and thus I believe upgrading to a strong buy rating is now appropriate.

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Introduction

Thanks to Methanex (NASDAQ:MEOH) seeing a strong recovery during 2021, it seemed a new era of shareholder returns was afoot upon entering 2022, as my previous article discussed. Despite subsequently boosting their

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in MEOH over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.