Daily Stock Pick: Schweitzer-Mauduit International

A new portfolio of stocks I started building last Tuesday, named Vista, will select its first stock this weekend. Vista is the sixth portfolio I've built (at a one dividend dog per-week pace) since 2014. Six portfolios = VI for Vista!

Vista is planned to Look Ahead for Outstanding, Proven, Dividend Winners. (Like Aristocrats)

Today we'll review the fourth of four Basic Materials stock candidates for the very first selection in the Vista portfolio

My subject today is a paper and paper products company named, Schweitzer-Mauduit International Inc. Its trading ticker symbol is SWM. This is my first ever report on Schweitzer-Mauduit International Inc for my new Vista portfolio. I did look at it several times for my previous Volio Portfolio.

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, such as, alkaline battery separator papers; and commodity paper grades for printing and writing, flooring laminates, and food service packaging. 

It generates a majority of its revenue from the Advanced Materials and Structures segment.

The company was incorporated in 1995 and is headquartered in Alpharetta, Georgia.

I use three key data points to gauge dividend equities or funds like Schweitzer-Mauduit International Inc:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether a company has made, is making, and will make money. 

SWM Price

Schweitzer-Mauduit International Inc's price per share closed at $29.19 yesterday. A year ago its price was $36.32. Price fell $7.13 or just over 19.6% last year.

Schweitzer-Mauduit's stock trades in the range of $20 to $40 this next year, its recent $29.19 price might rise by $6.81 to reach $36.00 by September 11, 2021. 

SWM Dividends

Schweitzer-Mauduit's most recently declared quarterly dividend was $0.44 payable September 18th and will total $1.76 annually and yield 6.03% at yesterday's $29.19 price.

SWM Gains?

Adding the $1.76 annual anticipated dividend to my $6.81 optimistic estimate of Schweitzer-Mauduit's price upside shows an $8.57 potential gross gain, per share, to be reduced by any costs to trade the shares.  

If we put a little under $1,000.00 today in Schweitzer-Mauduit International Inc at $29.19, we would buy 34 shares of SWM stock.

A $10 broker fee paid half at purchase and half at sale could cost us about $0.29 per share.

Subtract that $0.29 brokerage cost from my estimated $8.57 gross gain per share results in a net gain of $8.28 X 34 shares = $281.52 for a 28.15% net gain on a $992.46 investment.

Thus, Schweitzer-Mauduit International Inc shows a possible 28.15% net gain including a 6.00% dividend yield. It could be more, it could be less. 

All of the estimates above are speculation based on the past history of Schweitzer-Mauduit International Inc. Only time and money invested in this stock will determine its worth.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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William K. 3 years ago Member's comment

Sufficient research can usually locate companies that have a record of doing well, and an investor seeking a long term source of income will consider those types of investments.