Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and feeble growth in the company's earnings per share.
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Highlights from the ratings report include:
- Net operating cash flow has slightly increased to $30.16 million or 6.84% when compared to the same quarter last year. In addition, MATTHEWS INTL CORP has also vastly surpassed the industry average cash flow growth rate of -123.89%.
- 41.80% is the gross profit margin for MATTHEWS INTL CORP which we consider to be strong. Regardless of MATW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MATW's net profit margin of 7.20% compares favorably to the industry average.
- Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, MATW has underperformed the S&P 500 Index, declining 13.43% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Diversified Consumer Services industry and the overall market, MATTHEWS INTL CORP's return on equity is below that of both the industry average and the S&P 500.
Matthews International Corporation designs, manufactures, and markets memorialization products and brand solutions for the cemetery and funeral home industries in the United States, Mexico, Canada, Europe, Australia, and Asia. The company has a P/E ratio of 13, below the S&P 500 P/E ratio of 17.7. Matthews International has a market cap of $805.3 million and is part of the industrial goods sector and industrial industry. Shares are down 8.3% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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