Finance

Seeking Alpha author makes case for Matthews International

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Seeking Alpha author Austin Rogers makes a case for the upside future of conglomerate Matthews International. . .a company which receives about 46% of its revenue from the death care space.  The article is really detailed about a little history of Matthews and where the company seems to be going in the future.

Here’s a couple of items the author mentions about Matthews:

  • Matthews International is a small-cap dividend growth stock that is easily overlooked for its small size and lack of simplicity.
  • The company is a conglomerate with multiple irons in different fires, from funeral home products to warehouse robots to lithium battery manufacturing machines.

There is a lot to be said about Matthews in this article which points out the three prongs of Matthews business are Memorialization (funeral and death care products), Industrial Technologies (battery storage and warehouse automation), and SGK Branding Solutions (branding/packaging for retail and pharmaceutical products).

At a simple glance, 69% of Matthews total business comes from North America and 46% of its revenues come from its Memorialization segment.  Here’s what the article says about the Memorialization segment:   “. . .the largest segment is the memorialization business, which sells caskets, headstones, cremation machines, and other funeral home products. The company holds a commanding market position in this arena, which makes it strongly leveraged to the total number of deaths. . . . Given aging demographics across the developed world, this market should enjoy steady growth for decades to come. An increasing number of these deaths are projected to be non-casketed, but fortunately for Matthews, the company’s globally leading market position in cremation equipment assures that it will benefit regardless.”

Again, according to the article, the Memorialization segment has several segments of its own.  This is where the author says the different areas rank in market share across North America:

  • Bronze Memorials – #1
  • Granite Memorials – #1
  • Caskets – #2
  • Cremation Equipment – #1

The author of the article goes on to give descriptions of the other two segments of Matthews business in some detail noting that Matthews foray into the lithium-ion battery business may bring the company into play as one of the bigger players in the EV automotive business.

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