On the same day that the Dow Jones Industrials average dropped the deepest in the past two years (Tuesday, September 13) Seeking Alpha author Austin Rogers opined in this article that death care conglomerate Matthews International (MATW) would be one of his Top 3 picks to choose as a stock in the category “Cheap Dividend stocks to consider”.
Here’s a little of what was said in the article:
- As you can see below (in a chart), the legacy memorialization segment, which makes gravestones, caskets, cremation machinery, and other death care products, retains the largest share of total sales and also has the highest margins. Though memorialization is expected to grow slower, it does reliably generate cash flows with which to invest in MATW’s fast-growing industrial and energy solutions businesses.
- Energy solutions, in particular, is an exciting business line that holds a commanding market position in manufacturing machinery engaged in the dry electrode process of lithium battery production. Orders for these machines are coming in from around the world faster than MATW is able to churn them out.
- Matthew’s enterprise value to EBITDA sits at about 7.5x, based on 2022’s estimated EBITDA range of $200 million to $210 million. That is far below its historical average EV to EBITDA multiple of ~14x.
- At the time of the article, according to Seeking Alpha, Matthews International current annual dividend yield was 3.5%
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