Financial Analysis: Energizer (ENR) and Matthews International (MATW)

Energizer (NYSE: ENR) and Matthews International (NASDAQ:MATW) are both consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, profitability, risk, earnings and dividends.

Dividends

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Energizer pays an annual dividend of $1.16 per share and has a dividend yield of 2.2%. Matthews International pays an annual dividend of $0.76 per share and has a dividend yield of 1.5%. Energizer pays out 43.3% of its earnings in the form of a dividend. Matthews International pays out 24.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Matthews International has raised its dividend for 6 consecutive years.

Profitability

This table compares Energizer and Matthews International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Energizer 9.40% 274.69% 10.55%
Matthews International 6.46% 15.09% 5.15%

Valuation & Earnings

This table compares Energizer and Matthews International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Energizer $1.76 billion 1.76 $201.50 million $2.68 19.36
Matthews International $1.52 billion 1.07 $74.36 million $3.07 16.32

Energizer has higher revenue and earnings than Matthews International. Matthews International is trading at a lower price-to-earnings ratio than Energizer, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Energizer has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Matthews International has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Energizer and Matthews International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Energizer 1 3 4 0 2.38
Matthews International 0 0 3 0 3.00

Energizer currently has a consensus target price of $60.29, suggesting a potential upside of 16.18%. Matthews International has a consensus target price of $83.50, suggesting a potential upside of 66.67%. Given Matthews International’s stronger consensus rating and higher possible upside, analysts plainly believe Matthews International is more favorable than Energizer.

Insider & Institutional Ownership

97.2% of Energizer shares are owned by institutional investors. Comparatively, 80.7% of Matthews International shares are owned by institutional investors. 1.8% of Energizer shares are owned by insiders. Comparatively, 3.8% of Matthews International shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Energizer beats Matthews International on 10 of the 17 factors compared between the two stocks.

Energizer Company Profile

Energizer Holdings, Inc. is a manufacturer, marketer and distributor of household batteries, specialty batteries and lighting products. The Company is a designer and marketer of automotive fragrance and appearance products. It operates through four geographic segments: North America, which consists of the United States and Canada; Latin America, which includes its markets in Mexico, the Caribbean, Central America and South America; Europe, the Middle East and Africa (EMEA), and Asia Pacific, which consists of its markets in Asia, Australia and New Zealand. The Company offers batteries using lithium, alkaline, carbon zinc, nickel metal hydride, zinc air and silver oxide constructions. These products are sold under the Energizer and Eveready brands in the performance, premium and price segments and include primary, rechargeable, specialty and hearing aid products. It manufactures, distributes and markets lighting products, including headlights, lanterns, kid’s lights and area lights.

Matthews International Company Profile

Matthews International Corporation is a provider of brand solutions, memorialization products and industrial technologies. The Company operates through three segments: SGK Brand Solutions, Memorialization and Industrial Technologies. The SGK Brand Solutions segment provides brand development, deployment and delivery (consisting of brand management, printing plates and cylinders, pre-media services and imaging services for consumer packaged goods and retail customers, merchandising display systems, and marketing and design services). The Memorialization segment manufactures and markets a line of memorialization products used primarily in cemeteries, funeral homes and crematories. The Industrial Technologies segment designs, manufactures and distributes a range of marking, coding and industrial automation solutions, order fulfillment systems and related consumables.

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