Daily Stock Pick: Schweitzer-Mauduit (SWM)
This week, I'm looking for the fourth materials sector representative of nine for my Ivy portfolio.
That materials sector has thirteen industries all related to mining, making, and delivering essential commodities. They are: agricultural inputs; aluminum; building materials; chemicals; coal; copper; industrial metals; gold; paper; silver; specialty chemicals; steel.
Today I'm reviewing a small-cap paper and paper products company, named Schweitzer-Mauduit International Inc. Its trading ticker symbol is SWM. I last reported on SWM on July 23, 2018.
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 the value of any dividend equity-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.
Those first three primary keys, however, best tell whether a company has made, is making, and will make money.
SWM Price
SWM's price per share closed at $38.14 yesterday. A year ago its price was $39.42. Price fell $1.28 or 4.35% in the past year.
Assuming SWM's stock trades in the range of $24 to $42 this year, SWM's recent $38.14 price could rise by $0.86 and go to $39.00 by mid-March, 2020.
SWM Dividends
SWM's most recent Quarterly dividend was $0.44 declared February 21st and payable March 22nd.
That $0.44 Q dividend equates to a $1.76 annual payout and a yield of 4.6% at yesterday's $38.14 closing price.
Gains For SWM?
Adding the $1.76 annual estimated dividend to my $0.86 estimate of SWM's price upside shows a $2.62 potential gross annual gain, per share, which will be reduced by costs to trade those shares.
Say we put a little under $1,000.00 today at the $38.14 recent stock price would buy us 26 Schweitzer-Mauduit International Inc shares.
A $10 broker fee paid half at purchase and half at sale costs $0.38 per share.
Subtract that $0.38 brokerage cost from the estimated $2.62 gross annual gain leaves a net gain of $2.24 X 26 shares
= $58.24 or 5.85% net gain on a $991.64 investment.
Therefore, Schweitzer-Mauduit International Inc whose trading ticker symbol is SWM now shows a possible net gain of 5.85% including a 4.6% dividend yield.
Two brokers cover this stock:
One says 'buy' SWM shares.
One says 'hold' your SWM shares.
So I get a little backing for my conservative upside estimate.
Therefore, you can look at Schweitzer-Mauduit International Inc and see it has made money, is making money, and could throw a net gain of 5.85% including a 4.6% 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 determine if Schweitzer-Mauduit International Inc is worth your time and money.
Disclosure: This article was compiled by Rydlun & Co., LLC from data derived from www.ycharts. com; www.finance.yahoo.com; analyst median target price by YCharts
Catch Your ...
more