Our analysis is based on comparing Matthews International Corp. with the following peers – Service Corporation International, StoneMor Partners L.P., Carriage Services Inc. and Hillenbrand, Inc. (SCI-US, STON-US, CSV-US and HI-US).
Matthews International Corp.’s dividend yield is 1.30 percent and its dividend payout is 29.82 percent. This compares to a peer average dividend yield of 1.57 percent and a payout level of 29.47 percent. This combination of a relatively lower dividend yield and a higher payout ratio suggest that the dividend payout might not be sustainable. Supporting this is the company’s average dividend quality score of 58 out of a possible score of 100, which points to some weakness in being able to sustain the higher payout ratio.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2017), MATW-US paid a medium quality dividend, which represents a yield of 1.26% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 1 was high quality and 4 were medium quality.
- The ending cash balance, with a dividend coverage of 2.64x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to September 30, 2017), MATW-US paid a medium quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 6.86x), investing cash flow (coverage of -6.51x), issuance cash flow (coverage of 0.67x) and twelve-month prior cash (coverage of 2.56x), for a total dividend coverage of 3.64x.
MATW-US’s issuance cash flow includes outflows from net share buybacks (coverage of -0.64x). Thus, the total coverage including share buybacks is 4.29x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||1.09||0.93||1.11||0.99||1.09||1.3|
|Dividend Payout (%)||20.51||29.53||27.23||29.56||29.82||29.82|
A complete list of metrics and analysis is available on the company page.
Matthews International Corp. engages in the provision of brand solutions, memorialization products, and industrial products. It operates through the following segments: SGK Brand Solutions, Memorialization, Industrial Technologies. The SGK Brand Solutions segment involves in graphics imaging business, including Schawk, and the merchandising solutions operations. The Memorialization segment offers cemetery products, funeral home products, and cremation operations. The Industrial Technologies segment offers includes company’s marking and automation products and fulfillment systems. The company was founded by John Dixon Matthews in 1850 and is headquartered in Pittsburgh, PA.
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