Melexis produces integrated circuits (ICs). It is focused on sensor and driver applications. Its sensors are used for accurately measuring the physical environment such as temperature, pressure, magnetic fields and positioning. Its main customers are in the automotive industry where it sells a wide range of products. It is a strong beneficiary of the move towards hybrid and fully electric vehicles. The move towards advanced driver assistance and safety systems also drives growth for its products.
Its history shows that it has a strong competitive position within structurally growing markets (even if global vehicle production remains flat). Its technology portfolio means that it should also expect to see growth from new industries, as its sensors can be used in a range of robotics and digital health applications as well as other industries. It has show an ability to grow its sales whilst maintaining strong levels of profitability. As well as its products helping to promote sustainability goals such as electrification of vehicles and driver safety systems, the company itself has a strong focus on sustainability and produces substantial information on its initiatives and progress, including reporting some Scope 3 data.
On historic earnings (2023), you are paying around 15x with a 4.5% dividend yield, for a structurally growing business which has historically produced returns on invested capital of over 30%.
2023
EV/EBITDA 11
EV/EBIT 12.9
PER 15.4
Div Yield(gross) 4.6%
ROCE 35%