Discounted Cash Flow Calculation for DB:MW1A using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:MW1A DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Matthews International's share price is below the future cash flow value, and at a moderate discount (> 20%).
Matthews International's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Matthews International's earnings available for a low price, and how does
this compare to other companies in the same industry?
Matthews International's earnings are expected to grow by 15.7% yearly, however this is not considered high growth (20% yearly).
Matthews International's revenue is expected to grow by 1.6% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Matthews International's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
2/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Matthews International's finances.
The net worth of a company is the difference between its assets and liabilities.
Matthews International is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Matthews International's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Matthews International's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
Debt is not covered by short term assets, assets are 0.6x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Joseph C. Bartolacci has been the Chief Executive Officer and President of Matthews International Corporation since October 1, 2006 and September 1, 2005 respectively. Mr. Bartolacci served as Principal Executive Officer, President and Manager of Schawk Inc. since July 29, 2014. Mr. Bartolacci served as the President of York Casket Development Company, Inc. He served as the Chief Operating Officer of Matthews International Corporation since September 1, 2005 and served as its President of Matthews Europe since 2002, President of York Casket Division since February 2004, Executive Vice President since January 1, 2004 and Office of the Chairman. Mr. Bartolacci joined Matthews in 1997 as General Counsel. He served as the President of Caggiati, S.p.A., its wholly-owned subsidiary in Parma, Italy since 1999. In 2000, he assumed responsibility for Matthews' European graphics operations. He has been an Independent Director of Federated Investors, Inc. since October 2016. He has been a Director of Matthews International Corporation since November 15, 2005. He serves as Director of St. Vincent College. Mr. Bartolacci holds Bachelor of Science in Accounting from St. Vincent College in Latrobe, PA and Juris Doctorate degree from the University of Pittsburgh School of Law.
Joseph's compensation has been consistent with company performance over the past year.
Joseph's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Matthews International management team is over 5 years, this suggests they are a seasoned and experienced team.
CEO, President & Director
CFO & Corporate Secretary
CTO & Director
Executive Vice President of Strategy & Corporate Development
Group President of SGK Brand Solutions & Director
Chief Information Officer
Senior VP & General Counsel
Senior Vice President of Human Resources
President of Environmental Solutions Division
VP & Controller
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Matthews International board of directors is about average.
Matthews International Corporation provides brand solutions, memorialization products, and industrial products worldwide. The company’s SGK Brand Solutions segment provides brand development and graphic design services, such as visual intellectual properties, packaging, and content creation; brand deployment and activation services, including design and production of merchandising exhibits and shopper experiences in digital and printed media channels; and consulting services to brand owners on workflow best practices, management and technologies, printing quality, measurement, and consistency. This segment also produces digital packaging artwork files, and pre-media graphics services for print and digital channels, as well as image carriers comprising printing plates and gravure cylinders; and develops digital tools. Its Memorialization segment manufactures and markets a range of memorialization products for use in cemeteries, funeral homes, and crematories. This segment offers cast bronze memorials, flush bronze and granite memorials, upright granite memorials and monuments, cremation memorialization products, granite benches, flower vases, crypt plates and letters, cremation urns, niche units, cemetery features and statues, caskets, community and family mausoleums, bronze plaques, letters, emblems, vases, lights, and photo ceramics, as well as architectural products to identify or commemorate people, places, events, and accomplishments. The company’s Industrial Technologies segment designs, manufactures, and distributes marking and coding equipment and consumables, industrial automation products, and order fulfillment systems for identifying, tracking, picking, and conveying consumer and industrial products. This segment serves manufacturers, suppliers, and distributors of durable goods and building products; consumer goods manufacturers; and pharmaceutical producers. Matthews International Corporation was founded in 1850 and is based in Pittsburgh, Pennsylvania.
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