Myers Industries (MYE) is one of the highest paying dividend stocks in the market. Our purpose in this report is to determine whether it is also one of the best dividend paying stocks.
Myers Industries is a manufacturing and distribution company with an international presence. It operates in North America, Central America, and South America. The company operates through two segments, materials handling and distribution. The material handling segment designs, manufactures and markets a range of plastics products; the distribution segment distributes tools, equipment and supplies used for tires and wheels on various kinds of vehicles.
Myers is a very small company (sales in 2015 were just $ 602 million and it has a market cap of under $ 400 million). Since these small companies tend to be less diversified across regions and because they tend to have less market power with their suppliers and vendors, small companies have to be even more disciplined in how they finance their operations.
Our greatest concern with MYE is that it does not seem to be exhibiting the proper amount of discipline. Despite the fact that its sales tend to be more erratic than the average firm, MYE uses more debt than most firms; and this reliance has increased significantly in the last few years. Its equity-to-assets ratio is now significantly below its long-term average.
MYE does not appear to be concerned. It has raised its dividend every year for at least five years. This is not totally unjustified. MYE’s cash flows from operations more than cover its dividend and its free cash flows have been positive for at least seven years.
There are other things to like about MYE. But on balance, we feel that MYE’s overall fundamentals warrant only a “C” rating (“C” means average). MYE has a very generous dividend, but we would not consider it one of our best dividend paying stocks.
Stat Sheet – Myers Industries 4/12/16
|Industry||Fabricated Plastic & Rubber|
|Market Cap||$ 386|
|Financial Strength||Below Average|
|Price Volatility||Above Average|
(Our assessment of this firm’s fundamentals will be in effect for the rest of calendar year 2016.)
If you would like to see the highest paying dividend stocks that we feel are the top dividend paying stocks, click the link below and scroll to the link titled “Highest Paying Dividend Stocks – In Focus.”
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