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Company name Matthews International Corp
Stock ticker MATW
Live stock price [stckqut]MATW[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Poor
EPS growth Poor
P/E growth Poor
EBIT growth Poor

ANALYSIS

Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $27.66
Target stock price (averages with growth) $26.86
Target stock price (averages with no growth) $25.34
Target stock price (manual assumptions) $26.03

The following company description is from Google Finance: http://www.google.com/finance?q=matw

Matthews International Corporation (Matthews) is a designer, manufacturer and marketer of memorialization products and brand solutions. Memorialization products consist of bronze and granite memorials and other memorialization products, caskets and cremation equipment for the cemetery and funeral home industries. Brand solutions include graphics imaging products and services, marking and fulfillment systems products, and merchandising solutions. The Company’s products and operations are consisted of six business segments: Cemetery Products, Funeral Home Products, Cremation, Graphics Imaging, Marking and Fulfillment Systems, and Merchandising Solutions. On November 26, 2012, the Company completed the acquisition of Wetzel Holding AG, Wetzel GmbH and certain related affiliates (collectively Wetzel). In December 2012 the Company acquired Pyramid Controls Inc. and its affiliate, Pyramid Control Systems.

 

 

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.
 

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Lufthansa Airbus A320-211
Lufthansa Airbus A320-211

 

This isn’t a travel site but I do like to help my readers save money. My goal in helping you is simply so that you have more money to invest in the stock market and retire in luxury. I travel a great deal and here are a few tips that I have picked up to help me save a few dollars when I am rushing to make arrangements.

My first tip is to plan ahead but maybe that isn’t possible. The reality is that the more advanced notice that you have, the easier it will be to get bargains. This is the plus one that I advertise in the title since if you don’t have a choice then you must make a choice (sorry for stealing the Rush lyric but couldn’t resist).

1 – Flexibility

Do you have any flexibility? The more you have the better you will do in finding a deal. If today’s events have caused you to make travel arrangements for today, you will probably be at the mercy of the airlines. If you’re even a little flexible with your travel plans, you may be able to find a deal that doesn’t break the bank.

2 – Update your twitter account and Facebook before you need it

A little bit of preparedness is well advised. One place to start is your Twitter feed and your Facebook account. Accounts like @Airfarewatchdogs and @farecomparedeals are just two of the many that should be in one of your feeds if you’re watching for last-minute deals. In addition, popular travel sites and even some airlines have e-mail lists, twitter feeds, and Facebook pages that send daily, weekly or monthly specials.

3 – Those last minute travel sites actually work

Search the last minute travel sites. Lastminutetravel.com as well as Expedia, Orbit and Travelzoo are places to check. Even if they aren’t the cheapest, you can get an idea of what would be a normal price so you have a basis of comparison. The one less obvious place to look are travel sites that cater to local areas. For example, Airtech.com offers last minute deals to Europe and Hawaii. Sites like this may be harder to find, but the best way to find these sites is sometimes through local connections. The person or group that is insisting you are traveling at the last minute may give you some ideas. It never hurts to ask.

4 – Date of the week matters and so does time of day

It is my observation, the cheapest travel day is Wednesday as most business people leave on Monday or Tuesday and then return home on Thursday afternoon or Friday. Your best bet is to avoid weekend travel which is when most people leave for vacations. Try to leave on a weekday and return on a weekday if possible. Also be flexible with your airport choice. For some travelers, there are multiple airports within a few hours from home. If you can travel to a larger airport where discount carriers have service, you may be able to save a substantial amount of money. Finally, leave late at night, early in the morning, or at noon. Those less desirable travel times have more flexibility in their pricing.

5 – Go by yourself

If you have to travel as a group or family, you are at the mercy of the airlines. Because airlines have reduced their total number of flights in order to keep all planes full, finding a good price for a group is difficult. Flying alone allows you to take advantage of a single last-minute seat that may have come available due to a cancellation or an unsold ticket.

6 – Travel agents can be your best friend

It’s true that travel agents will charge a premium to book your travel for you, but they often have access to discount travel deals that aren’t published online or alternative locations that are not easy to find. This doesn’t just include airline tickets; hotels and rental cars are worth discussing with an agent. The agent will be more helpful though if you have already created a relationship or at least they feel like you are coming back in the future.

7 – Name your price

Sites where you can name a price you’re willing to pay for a hotel, airline ticket or rental car sometimes net consumers fantastic rates at the last minute. Make sure you shop around before bidding so you don’t end up bidding higher than another site’s regular price. Priceline.com is the most common of these but there are others out there – just do a little web searching.

8 – Lower your standards

You may love to book at Delta, United, Westin, Marriott, or Hilton because of the great service that you receive and their loyalty program. However, those loyalty points and extra perks cost money. There is no free lunch. Consider lower budget hotels and airlines if you are in a rush. The reality is that if you are rushing to get somewhere, all you really probably need are clean sheets and towels. That free bottled water and mints on the pillow are nice but may not be affordable in all cases. Prioritize your reason to travel above your desire to add loyalty points and you can surely save a few dollars.

Image from Wiki Media (http://commons.wikimedia.org/wiki/File:Lufthansa_Airbus_A320-211_D-AIQT_02.jpg) 

 

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Company name PerkinElmer, Inc.
Stock ticker PKI
Live stock price [stckqut]PKI[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Fair
Sales growth Poor
EPS growth Good
P/E growth Good
EBIT growth Poor

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $53.02
Target stock price (averages with growth) $83.7
Target stock price (averages with no growth) $77.1
Target stock price (manual assumptions) $20

The following company description is from Google Finance: http://www.google.com/finance?q=pki

PerkinElmer, Inc. is a provider of technology, services and solutions to the diagnostics, research, environmental, industrial and laboratory services markets. Through the Company’s advanced technologies, solutions, and services, it addresses issues related to health and safety of people and their environment. It operates in two segments: Human Health and Environmental Health. In February 2011, it acquired chemagen Biopolymer-Technologie AG (chemagen). In March 2011, it acquired ArtusLabs, Inc. (ArtusLabs). In March 2011, it acquired specified assets and assumed specified liabilities of ID Biological Systems, Inc. (IDB). In April 2011, it acquired CambridgeSoft Corporation (CambridgeSoft). In May 2011, it acquired Geospiza, Inc. (Geospiza). In May 2011, it acquired Labtronics, Inc. (Labtronics). In June 2011, it acquired Dexela Limited (Dexela). In November 2011, it acquired Caliper Life Sciences, Inc. (Caliper).

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.
 

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Company name Silgan Holdings Inc.
Stock ticker SLGN
Live stock price [stckqut]SLGN[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Poor
EPS growth Poor
P/E growth Good
EBIT growth Poor

ANALYSIS

Confident Investor Rating Fair
Target stock price (TWCA growth scenario) $41.49
Target stock price (averages with growth) $47.99
Target stock price (averages with no growth) $39.11
Target stock price (manual assumptions) $41.66

The following company description is from Google Finance: http://www.google.com/finance?q=slgn

Silgan Holdings Inc. is a manufacturer of rigid packaging for shelf-stable food and other consumer goods products. The Company operates three businesses: metal container business, closures business and plastic container business. The Company’s products include steel and aluminum containers for human and pet food and general line products; metal, composite and plastic vacuum closures for food and beverage products and plastic closures for the dairy and juice markets, and custom designed plastic containers, tubes and closures for personal care, food, health care, pharmaceutical, household and industrial chemical, pet care, agricultural chemical, automotive and marine chemical products. Its products are used for a variety of end markets and it operates 81 manufacturing plants in North America, Europe, Asia and South America. In July 2012, the Company acquired Ontas Oner Teneke Ambalaj Sanayi ve Ticaret A.S. In August 2012, it acquired the plastic food container operations of Rexam PLC.

 

 

Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in this stock as long as the price is correct. Most of the fundamentals of this company are good but there are some concerns.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.
 

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johnny_automatic_money_bags

While I don’t typically invest in a company due to its dividends, others do. If you are one of those people, then you need to understand what to look for to make sure you are buying into a decent company. You need to be confident that your investment will be able to maintain or grow its dividend while not driving the company into the ground.

Dividends can (and should) flow from the cash flows derived from earnings, but there are other ways to pay out a dividend. Consider these other options. A company could pay out a dividend by:

 

  1. Draining its cash holdings.
  2. Selling off assets.
  3. Diluting your investment by issuing more shares of stock.
  4. Increasing its risk position by taking on more debt.

The problem here is that all of these options are temporary solutions. You eventually run out of cash and assets. Issuing more shares to pay shareholders can turn into a legal version of a Ponzi scheme. And increasing debt increases bankruptcy risk. Only long-term earnings power can sustainably fuel big dividends.

I have written a series of articles on how to read an annual report in 20 minutes. This is if you are choosing a stock after it has passed all of the standard metrics that I describe in my book, The Confident Investor. If you are buying the stock for another reason, such as for its dividend return, then you need to do more homework.

If you are choosing a stock based on its dividends, there are few things to check in the last 3 annual reports. Luckily, you really do not need to dig into the individual annual reports if you do not want to go through that effort. The information is in those reports, but free websites do most of the heavy lifting. You can find this information on the financial portals of Yahoo and MSN, but for my example I will use Morningstar.  Go to Morningstar.com and search for GE.  GE is the NYSE symbol for General Electric. Most people that own General Electric do so for its dividends and its exposure to the manufacturing sector and the international markets. According to Dividend.com, GE is currently offering a dividend yield of 3.27% and an annual payout of $0.76. This yield is not enough to get rich on, but it currently is beating your bank savings account.

If you go to the quotes page of Morningstar for GE, you can see a quick overview of the company. Scroll down to the Financials section and you can follow along. The first thing I want to look for is not included in the above list. I want to make sure the company is growing its top line revenue over the last 3 years and that it has been profitable for the last 3 years. Note that this would be a different check if you were buying the company as a stock growth company but in this case we are buying it for dividends. We need to make sure the dividends are coming from a solid company and those dividends are not going to be disrupted. In the case of GE, you can see that both situations are true even though Net Income is the lowest it has been in the last 3 years. That drop in income would have been very troublesome if we were evaluating the Confident Investor Rating that I describe in my book. In the case of a dividend investment, it has maintained enough profit for us to feel confident in the continued profitability.

Now let’s jump over to the Financials tab and select the Cash Flow sub tab (immediately below the tabs are sub tabs). Scroll all the way to the bottom and we see that the Operating Cash Flow and Free Cash Flow are decreasing. This is a problem.  We need this number to be increasing or at least steady to trust a dividend payout.

The next item is assets. Stay on the Financials tab, but go to the Balance Sheet sub tab. Look at the Net Property, Plant and Equipment line (it should be bold). This isn’t too bad. Over the last 5 years, it has gone up and down. The worst move was about 10%, but lately it has even increased a bit. This is a sign that the company is continuing to invest in its infrastructure and at least isn’t selling it off to satisfy its dividend needs.

To check the number of shares outstanding, we can jump to the Key Ratios tab. Halfway down the Financials section is Shares. Here, we can see that the number of shares outstanding is essentially the same YOY for the last 3 years. This is fine.

For the last check, stay on the Key Ratios tab and look at the Key Ratios section. On the sub-tab Financial Health, you will see Total Liabilities. In this case, the liabilities are decreasing slightly. This means the company isn’t taking on debt to pay your dividend.

Overall, General Electric is a fairly safe dividend investment. While I don’t typically invest in a company due to its dividends, others do. If you are one of those people, then you need to understand what to look for to make sure you are buying into a decent company. You need to be confident that your investment will be able to maintain or grow its dividend while not driving the company into the ground.

The reality is that General Electric is not likely to decrease the dividend even though it has a few warning signs. Cutting a dividend almost always results in a drop in share price. Since executives and board members are usually paid with stock or receive bonuses based on stock price, they don’t want that price to drop. They will do unnatural acts if needed to maintain the stock price. This is the problem with focusing only on dividends for an investment. That addiction to the dividend can cause companies to make really bad decisions in the hopes that investors will not run from an ailing company. However, there is no free lunch for dividend owners. If you want to trust your dividend and hope that it can grow, choose companies that are extremely well run.

Do you have any questions about this? I would spend more time on this in a book, but hopefully this article gives you a few things to consider. Let me know below in the comments or send me a tweet at @ConfidentInvest.

Image is sourced from OpenClickart.com

[stckqut]GOOGL[/stckqut]