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In Hawaii, Matson, Inc. (NYSE:MATX) is a big name. The name represents the main shipper and transportation method between the Hawaiian islands and the continental U.S. Though Matson, Inc. doesn't only service Hawaii, a sizable amount of business is from Hawaii and therefore a staple and a reason to examine this stock more closely.

The Matson, Inc. Organization

Matson, Inc. (MATX) is the parent company of Matson Navigation Company, Inc., who in turn is the parent company of Matson Logistics, Inc. and Matson Terminals, Inc. Matson Navigation Company, Inc.

The Matson Navigation Company, Inc. was founded in 1882 and services Hawaii, Guam and Micronesia and also provides an expedites service from China to Southern California. The fleet consists of 17 vessels, which includes container ships, customized barges, and a combination container of roll-on/roll-off ships. The business also provides leasing services for containers and chassis. Matson Logistics, Inc. was founded in 1987 and expands Matson's ability to transport goods in the continental U.S. by using additional services such as rail, highway transport and warehousing. Matson Terminals, Inc. was created in 1921 and provides container stevedoring, terminal, vessel husbanding and equipment maintenance services for Matson and third parties in Hawaii. Matson has a partial ownership stake in the Stevedoring Services of America, Inc., which manages Matson's container stevedoring on the U.S. West Coast.

Key Statistics

Yahoo! Finance has posted the following key statistics as provided by Capital IQ:

Valuation Measures

Market Cap (intraday)

1.11B

Enterprise Value (July 6, 2013)

1.36B

Trailing P/E (ttm, intraday)

21.85

Forward P/E (fye December 31, 2014)

16.28

PEG Ratio (5 yr expected)

1.79

Price/Sales (TTM)

0.69

Price/Book (mrq)

3.86

Enterprise Value/Revenue

0.85

Enterprise Value/EBITDA

7.37

Financial Highlights

Fiscal Year

Fiscal Year Ends

fye December 30

Most Recent Quarter (mrq)

March 31, 2013

Profitability

Profit Margin

3.22%

Operating Margin

7.10%

Management Effectiveness

Return on Assets

3.79%

Return on Equity

8.38%

Income Statement

Revenue

1.59B

Revenue Per Share

37.4

Qtrly Revenue Growth (yoy)

7.80%

Gross Profit

221.90M

EBITDA

184.10M

Net Income Avl to Common

59.10M

Diluted EPS

1.19

Qtrly Earnings Growth (yoy)

139.50%

Balance Sheet

Total Cash (mrq)

11.00M

Total Cash Per Share (mrq)

0.26

Total Debt (mrq)

301.10M

Total Debt/Equity (mrq)

105.98

Current Ratio (mrq)

1.16

Book Value Per Share (mrq)

6.66

Cash Flow Statement

Operating Cash Flow

119.10M

Leveraged Free Cash Flow

115.03M

Trading Information

Stock Price History

Beta

1.11

52-Week Change

2.68%

S&P 500 52-Week Change

20.66%

52-Week High (January 31, 2013)

27.69

52-Week Low (September 24, 2012)

19.96

50-Day Moving Average

25.28

200-Day Moving Average

25.19

Share Statistics

Average Volume (3 month)

285516

Average Volume (10 day)

881900

Shares Outstanding

42.68M

Float

39.11M

% Held by Insiders

1.03%

% Held by Institutions

81.10%

Shares Short (as of June 14, 2013)

719.66K

Short Ratio (as of June 14, 2013)

3.2

Short % of Float (as of June 14, 2013)

1.90%

Shares Short (prior month)

661.29K

Dividends & Splits

Forward Annual Dividend Rate

0.64

Forward Annual Dividend Yield

2.60%

Trailing Annual Dividend Yield

0.6

Trailing Annual Dividend Yield

2.30%

5 Year Average Dividend Yield

4.70%

Payout Ratio

63.00%

First-Quarter 2013 Earnings Conference Call Highlights

Matson, Inc. held its first-quarter earnings conference call on May 6, 2013. Matson, Inc. is projecting that in 2013 ocean transportation operating income will be moderately higher than in 2012. This will be due to moderate increases in Hawaii volume, a flat volume from Guam, modest erosion in China rates, and a breakeven performance at SSAT. Logistics operating income is expected to be 1-2% of revenues due to continued expense control and volume increases, and an improved Northern California warehouse operations after warehouse consolidations. And maintenance capital expenditures are expected to be approximately $30M exclusive of new vessels.

Cash from profits was used to (1) maintain the quarterly dividend of $0.15 per share, (2) 1Q13 maintenance capital expenditures of $6.3M, (3) Reef Shipping Limited asset acquisition of $9.6M, and (4) debt reduction by $18M.

Other Points to Consider

  • Net income between from 2010 to 2012 showed a steep decline then increase from $92.1M to $34.2M to $45.9M.

  • The 10 simple moving average is only slightly below the 30-day exponential moving average, sometimes even being above the 30 day.

  • As of July 6, 2013, the share price of $26.05 per share is 94.1% of Matson, Inc.'s 52-week high.

  • The top three institutional holders are Pershing Square Capital Management, L.P. (3,033,985 shares); Dimensional Fund Advisors, L.P. (2,670,161 shares); and Vanguard Group, Inc. (2,164,255 shares).

I'll Wait For Now...

Based off of the information I've presented, I think Matson, Inc. is a great company with good fundamentals, statistics and dividend yield. However, I feel that this business model is more cyclical and I'd like to see a pullback of a few more percent before I consider jumping in.

Source: Why I'll Take My Time With Matson, Inc.