A portfolio of stocks I'm building, named Ivy, holds 52 dividend dogs. Ivy is the fourth portfolio I've built (at a one dividend dog per week pace) since 2014. Four portfolios = IV!
Today I'm reviewing the second of five materials sector stocks this week striving to become the ninth of nine from that sector to join the Ivy folio. This is the last pick for Ivy!
This materials sector includes thirteen industries all related to mining, making, and delivering essential commodities. They are: agricultural inputs; aluminum; building materials; chemicals; coal; copper; industrial metals; steel; paper; silver; specialty chemicals; gold.
Today I'm reviewing a small-cap building materials company Today I'm reviewing a small-cap paper and paper products company named Schweitzer-Mauduit International Inc. Their trading ticker symbol is SWM. I last reported on this company on March 19, 2019.
Schweitzer-Mauduit International, Inc. is a diversified producer of premium specialty papers and resin-based products. It manufactures and sells paper and reconstituted tobacco products to the tobacco industry as well as specialized paper products.
The company operates in two segments namely Advanced Materials & Structures, which manufactures resin-based products used in specialty applications in the filtration, infrastructure and construction, transportation, industrial, and medical end-markets, and Engineered Papers, which produces cigarette papers and reconstituted tobacco products for cigarette and cigar manufacturers, as well as various other non-tobacco paper products.
It generates a majority of its revenue from the Advanced Materials and Structures segment.
Schweitzer-Mauduit International, Inc. was founded in 1995 and is headquartered in Alpharetta, Georgia.
I use three key data points to gauge dividend-paying equities or funds like Schweitzer-Mauduit International, Inc:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest or not.
Those three basic keys, however, best tell whether a company has made, is making, and will make money.
SWM Price
SWM's price per share closed at $33.67 yesterday. A year ago its price was $40.84. In a year its price fell $6.97 or 17%.
Assuming SWM's stock trades in the range of $25.00 to $45.00 this year, SWM's recent $33.67 price could rise by $4.33 and go to $38.00 by August 2020.
SWM Dividends
SWM's latest declared quarterly dividend was $0.44 payable September 20th.
That $0.44 Q payout combined with the previous three generates an annual payout of $1.76 yielding 5.23% based on yesterday's $33.67 closing price.
SWM Gains?
Adding the $1.76 annual estimated dividend to my $4.33 estimate of SWM's price upside shows a $6.00 potential gross gain, per share, which will be reduced by costs to trade these shares.
Say we put a little under $1,000.00 today at the $33.67 recent stock price, we'd buy 29 Schweitzer-Mauduit International Inc shares.
A $10 broker fee paid half at purchase and half at sale will cost us $0.34 per share.
Subtract that $0.34 brokerage cost from the estimated $6.00 gross estimated gain leaves a net gain of $5.66 X 29 shares = ($164.14) or a 16.5% net gain on a $976.43 investment.
Therefore, Schweitzer-Mauduit International Inc. whose trading ticker symbol is SWM now shows a possible net gain of 16.5% including a 5.23% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to learn if Schweitzer-Mauduit International Inc is worth your time and money.
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