Matson, Inc. – Value Analysis (NYSE:MATX) : September 25, 2017

Capitalcube gives Matson, Inc. a score of 81.

Our analysis is based on comparing Matson, Inc. with the following peers – Golar LNG Limited, Genco Shipping & Trading Ltd and Rand Logistics, Inc. (GLNG-US, GNK-US and RLOG-US).

Investment Outlook

Matson, Inc. has a fundamental score of 81 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
  • It currently trades at a Price/Book ratio of (2.39).
  • MATX-US‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • MATX-US has a successful operating model with relatively high net profit margins and asset turns.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
  • MATX-US‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • While MATX-US‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • MATX-US might have enough interest coverage to take-on additional debt prudently.

Access our research and ratings on Matson, Inc.

Leverage & Liquidity

MATX-US might have enough interest coverage to take-on additional debt.

  • While MATX-US‘s debt to enterprise ratio of 37.06% is on the high side compared to an overall benchmark of 25% (Note: The peer median is currently 64.76%), it also enjoys a relatively high interest coverage level of 4.85x which may give the company enough financial strength to support additional debt. Thus, the company is classified as having Some Capacity to raise more debt.
  • All 3 peers for the company have an outstanding debt balance.

MATX-US has maintained its Some Capacity profile from the recent year-end.

  • MATX-US‘s interest coverage is its lowest relative to the last five years and compares to a high of 11.58x in 2015.
  • Though its interest coverage decreased to 4.85x from 5.85x (in 2016), its peer median remained relatively stable during this period at -0.68x.
  • Interest coverage fell 0.78 points relative to peers. It is also above the 2.50x coverage benchmark unlike the peer median.
  • MATX-US‘s debt-EV is its highest relative to the last five years and compares to a low of 19.03% in 2015.
  • While its debt-EV increased to 37.06% from 32.94% (in 2016), its peer median decreased during this period to 64.76% from 68.03%.
  • Relative to peers, debt-EV rose 7.40 percentage points.

Access the detailed analysis for Matson, Inc.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Golar LNG Limited 54.3 0.51 -1.36 -1.85
Genco Shipping & Trading Ltd 75.22 5.84 -2.18 -0.09
Rand Logistics, Inc. 91.65 0.09 -0.01 2.44
Matson, Inc. 37.06 1.02 4.85 31.26
Peer Median 64.76 0.77 -0.68 1.18
Best In Class 37.06 5.84 4.85 31.26

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Company Profile

Matson, Inc. is a holding company, which engages in the provision of logistics and transportation services. It operates through two segments: Ocean Transportation and Logistics. The Ocean Transportation segment offers marine freight, container stevedoring, maintenance, and terminal activities. The Logistics segment includes domestic and international rail intermodal services, regional highway brokerage, specialized hauling, expedited freight operations, supply chain management, storage, and distribution services. The company was founded in 1882 and is headquartered in Honolulu, HI.


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