DB:MW1A

Stock Analysis Report

Executive Summary

Matthews International Corporation provides brand solutions, memorialization products, and industrial products worldwide.

Rewards

Trading at 9% below its fair value

Earnings are forecast to grow 90.69% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 2.24% is not well covered by earnings



Snowflake Analysis

Moderate growth potential second-rate dividend payer.


Similar Companies

Share Price & News

How has Matthews International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MW1A has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.4%

MW1A

0.8%

DE Commercial Services

0.3%

DE Market


1 Year Return

-9.2%

MW1A

7.5%

DE Commercial Services

13.8%

DE Market

Return vs Industry: MW1A underperformed the German Commercial Services industry which returned 9.1% over the past year.

Return vs Market: MW1A underperformed the German Market which returned 17.1% over the past year.


Shareholder returns

MW1AIndustryMarket
7 Day-3.4%0.8%0.3%
30 Day3.0%-2.1%1.3%
90 Day2.4%8.5%5.2%
1 Year-7.2%-9.2%11.4%7.5%17.4%13.8%
3 Year-44.7%-47.3%5.5%-3.6%15.9%5.7%
5 Year-12.0%-17.6%11.2%-4.5%27.9%10.6%

Price Volatility Vs. Market

How volatile is Matthews International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Matthews International undervalued compared to its fair value and its price relative to the market?

8.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MW1A (€33.6) is trading below our estimate of fair value (€36.94)

Significantly Below Fair Value: MW1A is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: MW1A is unprofitable, so we can't compare its PE Ratio to the Commercial Services industry average.

PE vs Market: MW1A is unprofitable, so we can't compare its PE Ratio to the German market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MW1A's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MW1A is good value based on its PB Ratio (1.6x) compared to the DE Commercial Services industry average (3.2x).


Next Steps

Future Growth

How is Matthews International forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

90.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MW1A is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (-0.4%).

Earnings vs Market: MW1A is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: MW1A's is expected to become profitable in the next 3 years.

Revenue vs Market: MW1A's revenue (1.7% per year) is forecast to grow slower than the German market (4.8% per year).

High Growth Revenue: MW1A's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MW1A's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Matthews International performed over the past 5 years?

3.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MW1A is currently unprofitable.

Growing Profit Margin: MW1A is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MW1A is unprofitable, but has reduced losses over the past 5 years at a rate of 3.7% per year.

Accelerating Growth: Unable to compare MW1A's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MW1A is unprofitable, making it difficult to compare its past year earnings growth to the Commercial Services industry (6.2%).


Return on Equity

High ROE: MW1A has a negative Return on Equity (-5.41%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Matthews International's financial position?


Financial Position Analysis

Short Term Liabilities: MW1A's short term assets ($583.7M) exceed its short term liabilities ($279.9M).

Long Term Liabilities: MW1A's short term assets ($583.7M) do not cover its long term liabilities ($1.2B).


Debt to Equity History and Analysis

Debt Level: MW1A's debt to equity ratio (131%) is considered high.

Reducing Debt: MW1A's debt to equity ratio has increased from 94.3% to 131% over the past 5 years.

Debt Coverage: MW1A's debt is not well covered by operating cash flow (13.9%).

Interest Coverage: MW1A is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

Inventory Level: MW1A has a low level of unsold assets or inventory.

Debt Coverage by Assets: MW1A's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Matthews International's current dividend yield, its reliability and sustainability?

2.21%

Current Dividend Yield


Dividend Yield vs Market

company2.2%marketbottom25%1.3%markettop25%3.6%industryaverage3.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: MW1A's dividend (2.24%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: MW1A's dividend (2.24%) is low compared to the top 25% of dividend payers in the German market (3.53%).


Stability and Growth of Payments

Stable Dividend: MW1A's dividends per share have been stable in the past 10 years.

Growing Dividend: MW1A's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: MW1A is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Matthews International's salary, the management and board of directors tenure and is there insider trading?

8.3yrs

Average management tenure


CEO

Joseph Bartolacci (59yo)

13.3yrs

Tenure

US$6,919,529

Compensation

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 Principa ...


CEO Compensation Analysis

Compensation vs Market: Joseph's total compensation ($USD6.56M) is above average for companies of similar size in the German market ($USD1.28M).

Compensation vs Earnings: Joseph's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

8.3yrs

Average Tenure

59yo

Average Age

Experienced Management: MW1A's management team is seasoned and experienced (10.9 years average tenure).


Board Age and Tenure

8.8yrs

Average Tenure

62yo

Average Age

Experienced Board: MW1A's board of directors are considered experienced (8.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Steven Nicola (59yo)

    CFO & Corporate Secretary

    • Tenure: 16.1yrs
    • Compensation: US$3.05m
  • Brian Dunn (62yo)

    Executive Vice President of Strategy & Corporate Development

    • Tenure: 5.5yrs
    • Compensation: US$1.72m
  • Joseph Bartolacci (59yo)

    CEO, President & Director

    • Tenure: 13.3yrs
    • Compensation: US$6.92m
  • Brian Walters (50yo)

    Senior VP & General Counsel

    • Tenure: 10.9yrs
    • Compensation: US$1.20m
  • Greg Babe (61yo)

    CTO & Director

    • Tenure: 9.2yrs
    • Compensation: US$1.34m
  • Steven Gackenbach (56yo)

    Group President of Memorialization

    • Tenure: 8.3yrs
    • Compensation: US$1.24m
  • Marcy Campbell (56yo)

    Senior Vice President of Human Resources

    • Tenure: 5.2yrs
  • Ed Brady (60yo)

    Head of Global Business Services

    • William Wilson

      Senior Director of Corporate Development & Investor Relations

      • Davor Brkovich

        Chief Information Officer


        Board Members

        • John Turner (73yo)

          Independent Chairman of the Board

          • Tenure: 9.9yrs
          • Compensation: US$310.00k
        • Alvaro Garcia-Tunon (67yo)

          Independent Director

          • Tenure: 10.3yrs
          • Compensation: US$225.00k
        • Morgan O'Brien (59yo)

          Independent Director

          • Tenure: 8.5yrs
          • Compensation: US$220.00k
        • David Schawk (63yo)

          Director

          • Tenure: 5.5yrs
          • Compensation: US$1.42m
        • Terry Dunlap (60yo)

          Independent Director

          • Tenure: 4.9yrs
          • Compensation: US$210.00k
        • Wendy Dietze (61yo)

          Independent Director

          • Tenure: 11.5yrs
          • Compensation: US$220.00k
        • Joseph Bartolacci (59yo)

          CEO, President & Director

          • Tenure: 13.3yrs
          • Compensation: US$6.92m
        • Don Quigley (63yo)

          Independent Director

          • Tenure: 4.3yrs
          • Compensation: US$210.00k
        • Jerry Whitaker (68yo)

          Independent Director

          • Tenure: 8.5yrs
          • Compensation: US$220.00k
        • Greg Babe (61yo)

          CTO & Director

          • Tenure: 9.2yrs
          • Compensation: US$1.34m

        Company Information

        Matthews International Corporation's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Matthews International Corporation
        • Ticker: MW1A
        • Exchange: DB
        • Founded: 1850
        • Industry: Diversified Support Services
        • Sector: Commercial Services
        • Market Cap: US$1.187b
        • Listing Market Cap: US$1.077b
        • Shares outstanding: 31.29m
        • Website: https://www.matw.com

        Number of Employees


        Location

        • Matthews International Corporation
        • Two NorthShore Center
        • Pittsburgh
        • Pennsylvania
        • 15212
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        MATWNasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDJul 1994
        MW1ADB (Deutsche Boerse AG)YesClass A Common StockDEEURJul 1994

        Biography

        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. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/26 21:06
        End of Day Share Price2020/01/24 00:00
        Earnings2019/09/30
        Annual Earnings2019/09/30


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.