Updated 6/2/25
Matthews International Corporation (MATW), a company with a legacy dating back to 1850, operates across three key segments: Memorialization, SGK Brand Solutions, and Industrial Technologies. With headquarters in Pittsburgh, it’s built a unique mix of traditional and evolving businesses, from cemetery memorials to battery technology and brand marketing services.
Currently trading around \$21.45, the stock has faced a rough year with a 24% decline. The company is undergoing a major transition, with a pending divestiture of SGK Brand Solutions, cost-cutting programs in motion, and continued commitment to its dividend. Leadership remains steady, but the pressure is on to deliver operational and financial improvements.
Recent Events
Over the past year, Matthews International has been navigating a tough stretch. The stock is down almost 24% over the last 12 months, while the broader market has continued to climb. The company’s revenue has taken a hit, declining more than 9% year-over-year. Meanwhile, net income has dropped into negative territory, with earnings per share coming in at -2.55.
Profit margins have narrowed significantly, with the trailing twelve-month net margin showing a loss of 4.6%. Even operating margin is barely positive. These aren’t the kinds of numbers that typically inspire confidence. The real concern, though, comes from the balance sheet—debt has ballooned to over $875 million, and cash on hand is just over $40 million. A debt-to-equity ratio above 214% suggests a company carrying a lot of financial weight.
Despite the pressure, Matthews has continued to pay out dividends, which is what makes this story more interesting for dividend investors. It’s still rewarding shareholders even as it works through operational challenges.
Key Dividend Metrics
🟢 Dividend Yield: 4.67%
🔵 Dividend Rate: $1.00 annually
🟡 5-Year Average Yield: 3.03%
🟠 Payout Ratio: 113.1%
🟣 Ex-Dividend Date: May 12, 2025
🟤 Last Dividend Paid: May 26, 2025
Dividend Overview
Looking at the yield alone, MATW stands out. A forward yield of 4.67% is nothing to dismiss, especially in a market where reliable income sources can be hard to find. When you compare that to its five-year average yield of 3%, today’s yield looks even more attractive.
But here’s where the nuance comes in. That higher yield hasn’t come from explosive earnings growth—it’s largely a result of the stock price falling. That’s something to keep in mind. The dividend itself hasn’t suddenly become more generous; the stock has just become cheaper.
The payout ratio tells another part of the story. At over 113%, Matthews is currently paying out more in dividends than it’s earning. That’s not a sustainable position over the long haul. Companies can get away with this for a while, especially if they have strong cash flow—but it’s not something that can last forever.
And yet, Matthews does have a bright spot: levered free cash flow of around $131 million over the past year. That’s a solid figure and suggests the company still has enough cash generation to cover its dividend payments—for now.
Dividend Growth and Safety
MATW doesn’t get flashy with its dividend growth, but it has been a consistent payer for decades. The increases have been slow and measured, which aligns with the company’s broader personality—steady, reliable, and conservative.
Still, there’s no ignoring the current stress. With earnings in the red and margins thin, the company doesn’t have a wide cushion. The payout ratio being over 100% adds risk to the equation. If earnings don’t improve or cash flow tightens, management might be forced to reevaluate the dividend policy.
Debt is a major factor here, too. Carrying nearly $900 million in debt and servicing it in a high-rate environment will continue to put pressure on cash. Interest payments will eat into the funds available for dividends unless operating performance improves.
Institutional investors seem to be maintaining their positions—about 80% of shares are held by institutions—and insider selling isn’t rampant. Short interest is moderate, sitting at around 7% of float, which shows some skepticism but not overwhelming bearish sentiment.
For now, the dividend remains intact. It’s backed more by cash flow than by profits, which isn’t ideal, but it’s workable in the short term. Over time, though, something will have to give—either improved profitability, reduced debt, or a shift in dividend policy.
Matthews International is an intriguing case. It’s not your typical high-growth story, and it’s not a rock-solid fortress. It’s somewhere in the middle—a legacy business adapting to a new world, still committed to rewarding its shareholders even as it restructures its foundation. For dividend-focused investors, it’s one to watch carefully.
Cash Flow Statement
Matthews International’s cash flow statement over the trailing twelve months paints a picture of a company tightening its belt. Operating cash flow dropped sharply to $30.76 million, down from $79.28 million the prior year, continuing a downward trend from $126.86 million in 2021. This decline reflects weaker profitability and growing challenges in converting revenue into actual cash. Free cash flow also turned negative, coming in at -$8.7 million, reversing several years of positive generation.
On the financing side, Matthews was active in managing its debt—raising over $1.24 billion but repaying slightly more than that in the same period. The result was a net reduction in debt load, though interest paid remains substantial, with last year’s figure sitting at $50.34 million. Capital expenditures also remained elevated at $39.46 million, reflecting continued investment despite tight cash flow. The company’s cash position stayed relatively stable, ending the period with $40.65 million, only slightly below last year’s $40.82 million.
Analyst Ratings
🟠 Matthews International Corporation (MATW) has recently seen some shifts in how analysts are viewing the stock. B. Riley Securities trimmed its price target from $54 to $40 but chose to keep a Buy rating in place. The lowered target came in response to ongoing concerns about operating performance and the strategic impact of shedding part of the business.
🔻 The divestiture of the SGK Brand Solutions segment was intended to streamline the business, but it’s expected to pull down EBITDA by about $60 million. That’s no small hit, especially when paired with underwhelming operating numbers and a wave of share repurchases. These moves have sparked concern over Matthews’ ability to manage its balance sheet, prompting a downgrade from S&P Global, which cut the credit rating to ‘B+’ from ‘BB-‘. The reasoning: leverage is elevated and there’s not yet a clear plan to reduce it.
🟢 Even with the downgrade, analysts haven’t lost all confidence. The average consensus price target sits at $38.00, suggesting there’s still some upside from current levels. But the road ahead depends heavily on the memorialization business, which now makes up about 80% of EBITDA. The industrial technologies arm hasn’t delivered the growth expected, leaving Matthews a bit too reliant on its legacy operations. For now, analysts are in a holding pattern, watching to see if financial discipline and better performance can bring the story back into balance.
Earnings Report Summary
Sales and Segment Performance
Matthews International’s latest quarterly results for fiscal 2025 kicked off with a dip in overall sales. The company brought in $401.8 million, a step down from the $450 million it reported in the same quarter last year. Most of the pressure came from the Memorialization and Industrial Technologies segments. Memorialization saw softer demand, largely due to a lower U.S. death rate and a drop in granite memorial orders. Meanwhile, Industrial Technologies faced some headwinds tied to delays in Tesla-related projects and legal challenges that added further drag.
Not everything was sliding, though. The SGK Brand Solutions segment held steady, edging up to $130.8 million in revenue from the prior $130.5 million. Growth in the U.S. brand market and stronger sales from the Asia-Pacific region helped support this division. Still, higher labor costs chipped away at margins just a bit.
Profitability and Strategic Moves
Adjusted EBITDA for the quarter came in at $40 million, which was down from $45.5 million last year. The shortfall was tied to softer results from Industrial Technologies and rising healthcare costs that added about $1.6 million to expenses. The bottom line also took a slight hit, with Matthews posting a net loss of $3.5 million, or $0.11 per share—just a bit wider than the $0.07 per share loss in the same quarter a year ago.
In response, the company is turning to cost control to shore up its position. It’s in the middle of a cost reduction push that’s expected to save up to $50 million annually. By the end of this fiscal year, they hope to have a run rate of $25 to $30 million in savings locked in. Another major move is the planned sale of the SGK Brand Solutions segment, which should wrap up by mid-2025. The goal is to use that cash to reduce debt and simplify operations going forward.
Looking Ahead
One highlight this quarter came from the legal front. Matthews received a favorable ruling in an arbitration case against Tesla, confirming that it holds the rights to its Dry Battery Electrode (DBE) technology. This opens the door for Matthews to now license or sell the DBE solution more broadly, which could turn into a valuable revenue opportunity over time.
Despite the challenges, leadership hasn’t backed away from its outlook. The company is sticking with its full-year adjusted EBITDA target of $205 million to $215 million. There’s a cautious tone, for sure, but also a sense that the pieces are in place for a leaner and more focused Matthews International by year-end.
Management Team
Matthews International Corporation is guided by a leadership team with long-standing ties to the company and a deep understanding of its evolving business. At the forefront is Joseph C. Bartolacci, President and CEO since 2006, who has been a part of Matthews in various roles since the mid-1990s. His long tenure has provided steady leadership through periods of transformation and operational shifts.
Supporting Bartolacci is Steven F. Nicola, the company’s CFO and Treasurer. Nicola has been with Matthews since 1991 and has played a critical role in shaping its financial strategies across different economic environments. Also on the executive team is Brian Walters, Executive Vice President and General Counsel. Walters brings legal depth and governance experience that supports the company’s broader compliance and corporate structure.
The board of directors brings together a range of perspectives. Chairman Alvaro Garcia-Tunon has a strong background in manufacturing, while director Katherine E. Dietze adds insight from global finance and investment sectors. Together, the team sets the tone for the company’s direction, combining operational continuity with a willingness to adapt.
Valuation and Stock Performance
As of the end of May 2025, Matthews International trades at $21.45. The past year hasn’t been kind to the stock, which has declined about 24% year-over-year. With a market cap near $665 million, the company remains in small-cap territory, and its enterprise value of $1.5 billion underscores the weight of its debt load.
Trading has ranged between $32.24 at its peak and $18.50 at its low over the past 52 weeks. It’s a wide band that speaks to investor uncertainty, with the stock drifting lower as earnings results and guidance have missed expectations. The company’s trailing price-to-earnings ratio is currently elevated, a reflection of earnings pressure rather than growth optimism. Meanwhile, the price-to-book ratio sits at 1.63, hinting that investors are still pricing in some level of long-term value, even if recent numbers haven’t inspired much confidence.
Analyst sentiment has cooled somewhat. Price targets have been revised lower in response to operational headwinds and strategic shifts. Even so, the consensus price target currently hovers around $38.00. That suggests analysts see upside potential, but only if Matthews can execute on its restructuring and stabilize its financial performance.
Risks and Considerations
There’s no denying the risks Matthews faces. The company is carrying a substantial debt load, with a debt-to-equity ratio over 200%. In a high-interest environment, that’s a notable headwind. It adds pressure on cash flow and limits flexibility when it comes to reinvesting in growth or returning capital to shareholders.
Cash generation has also come under strain. Operating cash flow has dropped considerably, and free cash flow turned negative in the trailing twelve months. That’s not sustainable over the long term and will need to be addressed, either through cost-cutting or improved revenue performance.
Matthews is heavily reliant on its Memorialization segment. That division contributes the majority of EBITDA, which makes the company vulnerable to shifts in demographic trends or changes in consumer preferences around end-of-life services. Meanwhile, the Industrial Technologies business has seen setbacks tied to delays in key projects and unresolved legal issues, both of which have weighed on results.
Another key development is the pending sale of the SGK Brand Solutions segment. On paper, it’s a positive—it frees up capital and sharpens operational focus. But it also removes a revenue-generating segment and changes the company’s overall mix. Transitions like this aren’t always smooth and can take time to show tangible benefits.
Final Thoughts
Matthews International is a company in motion. The leadership is experienced and aligned with long-term goals, and the moves being made—particularly the SGK divestiture and cost reduction plan—show a willingness to adapt. But there’s real work to be done. Cash flow has to improve. Debt needs to be brought down. And the company must show it can grow profitably with a leaner business model.
For investors following this story, the next few quarters will be important. Execution will speak louder than any strategic plan. If Matthews can stabilize operations and restore some momentum, there may be a compelling recovery narrative here. For now, it remains a company in transition with a lot riding on the road ahead.