Updated 3/11/25
Matson, Inc. (MATX) is a well-established player in the shipping and logistics industry, specializing in ocean transportation between the U.S., Hawaii, Alaska, Guam, and Asia. With a history dating back over a century, the company has built a strong reputation for reliability and efficiency in its niche.
As a mid-sized company with a market cap of around $4.25 billion, Matson may not be the first name that comes to mind for dividend-focused investors. However, it offers steady income potential backed by strong financial fundamentals. While shipping is a cyclical business with ups and downs, Matson has maintained profitability and has a solid balance sheet to support its dividend payments.
For investors looking at Matson from a dividend perspective, let’s break down the key metrics and see if it fits within an income-oriented portfolio.
Key Dividend Metrics
📌 Dividend Yield: 1.05%
💰 Annual Dividend Rate: $1.36 per share
📆 Most Recent Dividend Payment: March 6, 2025
❌ Ex-Dividend Date: February 6, 2025
📈 5-Year Average Dividend Yield: 1.50%
🛑 Payout Ratio: 9.48%
📊 Dividend Growth: Steady, but not aggressive
Dividend Overview
Matson’s dividend yield of just over 1% might not turn heads, but the company has a long-standing history of making reliable payments. The most impressive aspect is the incredibly low payout ratio of just 9.48%. This means Matson is keeping most of its earnings for reinvestment while still providing shareholders with a dividend.
A payout ratio this low signals financial strength. Many companies in the industrial and transportation sectors distribute 30-50% of their earnings as dividends. By comparison, Matson is taking a much more conservative approach, ensuring the ability to maintain and grow dividends even in tougher economic conditions.
Looking at historical yields, Matson’s 5-year average sits at 1.50%, which is higher than its current yield. This suggests the stock price has climbed, lowering the yield for new investors. Those looking for income may find better opportunities elsewhere unless Matson’s yield moves closer to its historical norm.
Dividend Growth and Safety
Dividend Growth: Slow and Consistent
Matson has been increasing its dividend steadily, but not in an aggressive way. Management appears more focused on maintaining financial flexibility rather than distributing a large portion of earnings to shareholders. Given its extremely low payout ratio, there’s plenty of room for future increases, but they’re likely to be modest.
For investors looking for high dividend growth, Matson might not be the best fit. However, those who value consistency and long-term reliability will find it appealing.
Dividend Safety: Strong and Secure
With a payout ratio under 10%, Matson’s dividend is among the safest in its industry. Even if earnings were to drop significantly, the company would have no trouble maintaining its payout.
Several factors reinforce the security of Matson’s dividend:
✅ Strong Cash Flow – With operating cash flow at $767.8 million, the company has plenty of liquidity to cover dividend payments.
✅ Low Debt – A debt-to-equity ratio of 28.24% shows a conservative financial approach.
✅ Essential Industry – Matson operates critical shipping routes, making its revenue stream more predictable than other transportation businesses.
Unless the global shipping industry experiences a severe downturn, Matson’s dividend is about as safe as it gets.
Chart Analysis
The chart for Matson, Inc. (MATX) shows a shift in momentum, with recent price action suggesting a potential trend change. There’s a clear breakdown from the previous uptrend, which was well-supported by the 50-day and 200-day moving averages until recently.
Moving Averages Breakdown
The 50-day moving average (orange line) had been trending above the 200-day moving average (blue line) for most of the past year, confirming a bullish structure. However, the price has now fallen below both moving averages, with the 50-day SMA curling downward and crossing under the 200-day SMA—a bearish technical signal known as the death cross. This suggests that the medium-term trend is weakening, and downside pressure may continue unless buyers step in to support the stock at lower levels.
Volume and Market Participation
Looking at the volume bars, there’s been a noticeable spike in selling volume over the past couple of months. The largest volume candle occurred during a sharp price drop in October, which could indicate an institutional selloff or a reaction to earnings or macroeconomic news.
More recently, volume has remained relatively elevated compared to mid-2024 levels, suggesting that market participants are still actively trading the stock. However, there haven’t been any significant volume surges to indicate strong buying support, which could mean further downside before a solid base forms.
Relative Strength Index (RSI) and Momentum
The RSI indicator at the bottom of the chart is hovering near the 38 level, signaling that the stock is approaching oversold conditions but hasn’t quite reached extreme levels. Typically, a reading below 30 would indicate that the stock is deeply oversold and could be due for a short-term bounce. The RSI had been much higher during the stock’s strong rally in late 2024 but has been steadily declining since early 2025, confirming the loss of momentum.
Recent Candlestick Action
Looking at the last five candles, there’s a pattern of lower highs and lower lows, reinforcing the current downtrend. The most recent candle has a relatively small body with a longer lower wick, which could indicate some buying pressure at the day’s lows, but not enough to signal a strong reversal. If the next few sessions see stronger bullish candles with increased volume, there could be a chance for a rebound.
Key Support and Resistance Levels
The stock recently broke below 130.61, which had been an area of previous price consolidation. This breakdown suggests that the stock is searching for a new support level. If it continues to decline, the next key support zone could be around 120, where the price found stability in mid-2024. On the upside, the 50-day moving average now acts as resistance, so any meaningful recovery would need to push back above that level to regain bullish momentum.
Analyst Ratings
In recent months, Materion Corporation (MTRN) has experienced a mix of analyst actions, reflecting both optimism and caution regarding its future performance.
Upgrades and Positive Initiations
📈 Seaport Global Securities initiated coverage with a Buy rating and set a price target of $135. This positive stance suggests an expectation of strong performance, possibly due to Materion’s strategic positioning in advanced materials and its potential for growth in various sectors.
📊 KeyBanc Capital Markets has consistently maintained an Overweight rating on Materion. Over the past year, they have adjusted their price targets upward multiple times, reflecting their ongoing optimism about the company’s trajectory. For example, they raised the price target from $130 to $140 and later to $157, indicating a belief in the company’s robust fundamentals and growth potential.
Downgrades and Neutral Positions
⚠️ Some analysts have adopted a more cautious approach. Raymond James downgraded Materion to Market Perform from Outperform. This shift to a neutral stance may stem from concerns about market conditions, competitive pressures, or internal challenges that could impact Materion’s near-term performance.
📉 While Materion has growth potential, some analysts point to macroeconomic uncertainty and industry competition as reasons to take a more reserved outlook on the stock. The downgrade signals a view that the company may face headwinds in maintaining profitability or expanding margins in the coming quarters.
Consensus Price Target
💰 The latest consensus price target for Materion stands at approximately $135. This represents the average of various analysts’ expectations and suggests a potential upside from current trading levels. However, price targets vary, with some analysts setting higher or lower expectations based on their individual assessments of the company’s financial performance and market conditions.
Materion continues to receive a mix of optimism and caution from analysts. While some remain bullish on its long-term prospects, others have raised concerns about near-term risks. Investors evaluating the stock should weigh both perspectives carefully.
Earnings Report Summary
Matson, Inc. (MATX) wrapped up 2024 on a strong note, delivering solid fourth-quarter and full-year earnings that show the company’s resilience in the shipping and logistics space. Despite industry challenges, Matson managed to pull off a better-than-expected performance, proving once again that it knows how to navigate shifting market conditions.
Fourth-Quarter 2024 Highlights
- Earnings per share came in at $3.80, beating expectations by a good margin. That’s a sign of strong operational efficiency and smart cost management.
- Revenue for the quarter hit $890.3 million, topping forecasts and showing that demand for Matson’s services remains steady.
- Net income was solid at $476.4 million, reflecting the company’s ability to generate strong profits despite economic uncertainties.
Full-Year 2024 Performance
- Matson finished the year with an annual EPS of $13.93, continuing its trend of steady growth.
- The company announced a quarterly dividend of $0.34 per share, keeping its commitment to rewarding long-term investors.
What’s Driving Growth?
One of the biggest reasons behind Matson’s strong performance was its ocean transportation segment. The company benefited from higher freight rates, especially in its China service, thanks to a mix of strong demand and strategic pricing. The logistics side of the business also saw a boost, with operating income increasing due to higher contributions from supply chain management services.
Looking Ahead
- Matson has been buying back shares aggressively, repurchasing about 11.2 million shares since 2021, which represents over 25% of its outstanding shares. This move signals confidence in its financial position and is a positive sign for investors.
- Freight rates are expected to stay elevated, particularly in the China market, but the company is keeping a close eye on potential geopolitical risks and policy changes that could impact trade.
- The focus remains on smart capital allocation—balancing investments for growth while continuing to return cash to shareholders through dividends and buybacks.
Overall, Matson’s latest earnings show a company that’s in control of its business, adapting to market changes, and finding ways to grow even in unpredictable conditions. Investors will be watching closely to see if the momentum continues into 2025.
Financial Health and Stability
Shipping is a capital-intensive business, so a strong balance sheet is essential. Fortunately, Matson appears well-positioned.
🔹 Total Cash: $266.8 million
🔹 Total Debt: $749 million
🔹 Current Ratio: 1.09 (shows ability to cover short-term obligations)
🔹 Return on Equity: 18.86% (solid profitability for a logistics company)
Matson’s moderate use of debt and steady cash flow generation allow it to handle economic cycles without major financial stress. The company has historically balanced capital expenditures with shareholder returns, ensuring long-term stability.
Valuation and Stock Performance
Matson’s stock is currently trading at $132.11, with a 52-week range of $100.50 to $169.12. Its price-to-earnings (P/E) ratio sits at 9.29, which is on the lower end compared to many industrial stocks.
Here’s a quick look at key valuation metrics:
📉 P/E Ratio: 9.29 (suggesting the stock is not overvalued)
📊 Price-to-Sales: 1.29 (reasonable for its industry)
📚 Price-to-Book: 1.60 (indicating fair value)
With a P/E ratio well below the market average, Matson does not appear overpriced. Investors looking for a steady, undervalued stock with strong earnings growth may find it appealing, especially if it dips closer to the lower end of its trading range.
Risks and Considerations
No stock is without risk, and Matson has a few factors investors should be aware of.
🚢 Industry Cyclicality – Shipping rates fluctuate based on global trade demand, which can impact earnings.
🌎 Economic Downturns – If trade volumes decline, revenue could take a hit.
💸 Low Dividend Yield – At just 1.05%, income-seeking investors may prefer higher-yielding options.
🏗️ Capital Expenditures – Matson must continuously invest in ships and infrastructure, limiting large dividend increases.
While Matson is financially strong, investors should keep an eye on global shipping trends and economic conditions, as these will impact its earnings and stock price.
Final Thoughts
Matson isn’t a high-yield dividend stock, but it offers steady income, strong financials, and one of the safest payout structures in the industry. The low payout ratio means there is plenty of room for future dividend growth, even if management has taken a conservative approach.
For income investors, Matson may not be a top pick due to its lower yield. However, for those who value financial strength and steady performance, it could be a good long-term addition to a diversified portfolio. While it may not be a core holding for dividend-focused portfolios, it offers stability and potential for long-term appreciation.
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