Mine Safety Appliances (MSA): An Opportunistic Play With a Potential 30% Upside

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Peer Comparison

At the current trading price of $49.70 per share, Mine Safety is worth $1.84 billion on the market. The market is valuing Mine Safety at around 11.74x EV/EBITDA. Honeywell, a much bigger company, has the market cap of $55.2 billion. Honeywell is valued at around 11.3x EV/EBITDA. 3M is worth $71.23 billion with the trading price of $103.23 per share. 3M is valued at 9.36x EV/EBITDA, a much cheaper valuation than that of Honeywell and Mine Safety. Among the three, 3M had the highest operating margin at 21.7% while the operating margin of Honeywell and Mine Safety were 11% and 12%, respectively.

Foolish Bottom Line

If Mine Safety were acquired at the similar valuation to the Sperian Protection deal, the company would be worth around $2.3 billion, a 30% premium compared to its current enterprise value of $2 billion. Thus, Mine Safety could be considered an opportunistic play for long-term investors at its current price.

The article An Opportunistic Play With a Potential 30% Upside originally appeared on Fool.com and is written by Anh HOANG.

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