WARNING: The consideration of this stock can only be done with an understanding that we're in a bear market. Please carefully consider the downside risks mentioned in this research recommendation before taking any actions. Despite the possible qualitative attributes of this company, the purchase of this stock should be considered speculative at this point in time.
According to MergentOnline, Matthews International (MATW
a designer, manufacturer and marketer principally of memorialization products and brand products and services. Memorialization products consist primarily of bronze memorials and other memorialization products, caskets and cremation equipment for the cemetery and funeral home industries. Brand products and services include graphics imaging products and services, marking products, as well as merchandising products and services. Co.'s products and operations are comprised of six business segments: Bronze, Casket, Cremation, Graphics Imaging, Marking Products and Merchandising Solutions.
Some would think that this business is a "no-brainer" to make money in. However, my experience is that companies in the funeral services industry have a hard time retaining their focus on their core competencies and profitability.
As a Dividend Achiever
, MATW has increased its dividend every year for 14 years in a row according to MergentOnline
. On Monday, March 30th, MATW eased to a new low after reaching a peak of $58.55 in September 2008. The fact that MATW was able to reach a new high in the middle of September 2008 is an astounding feat. However, the following decline has resulted in a near 50% decline as of March 30th.
According to Dow's theory, MATW has the following upside and downside targets:
Again, considerable attention must be directed at the prospect for the downside risk since we are in a bear market. Anyone buying this stock should be willing to accept that this company can easily go down to the $10 or $5 level or a loss of 64% and 82% respectively.
The fundamentals about this company are fair. However, of particular importance is the fact that MATW has an 11% dividend payout ratio. This is instrumental to the success of the company getting through the deepening recession.
Your own research of the funeral services industry will reveal that while death is certain only a few companies have managed to succeed at making money on a consistent basis. It is hoped that MATW is the right company for an otherwise difficult business.
Disclosure: no positions