Our analysis is based on comparing The Eastern Co. with the following peers – CompX International Inc. Class A, Mueller Industries, Inc., P&F Industries, Inc. Class A, NL Industries Inc, Haga SA Industria e Comercio Pfd, Stanley Black & Decker, Inc., Steel Partners Holdings L.P. and NN, Inc. (CIX-US, MLI-US, PFIN-US, NL-US, HAGA4-BR, SWK-US, SPLP-US and NNBR-US).
The Eastern Co.’s dividend yield is 1.68 percent and its dividend payout is 34.65 percent. This compares to a peer median dividend yield of 1.60 percent and a payout level of 21.53 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s average dividend quality score of 58 out of a possible score of 100, points to some weakness in the sustainability of its robust payout ratio, and makes its less attractive for dividend investors seeking current income.
Dividend Quality Overview
- Over the last twelve months (prior to June 30, 2017), EML-US paid a low quality dividend, which represents a yield of 1.68% 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 4 were high quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 7.05x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to June 30, 2017), EML-US paid a low 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 4.59x), investing cash flow (coverage of -16.33x), issuance cash flow (coverage of 12.30x) and twelve-month prior cash (coverage of 7.35x), for a total dividend coverage of 8.05x.
EML-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -0.78x).
These coverage ratio factors imply that the firm had to dip into the beginning cash balance to pay the dividend, which suggests a low dividend quality.
|Dividend Yield (%)||3.12||2.61||2.59||2.39||2.1||1.68|
|Dividend Payout (%)||28.99||37.84||35.77||47.83||35.2||34.65|
A complete list of metrics and analysis is available on the company page.
The Eastern Co. engages in the manufacture and sale of industrial hardware, security products, and metal products. It operates through the following segments: Industrial Hardware, Security Products and Metal products. The Industrial Hardware segment offers locks, latches, hinges, handles, lightweight honeycomb that are found on automotive industries as well as to the industrial equipment, military and marine sectors. The Security Products segment manufactures electronic and mechanical locking devices, both keyed and keyless, for the computer, electronics, vending and gaming industries. The Metal Products segment includes mine roof support anchors, couplers for railroad braking systems, adjustable clamps for construction and fittings for electrical installations. The company was founded by Eben Tuttle in 1858 and is headquartered in Naugatuck, CT.
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