Matson to Buyback 3M Shares; Bumps Quarterly Dividend by 30.4%


Ocean transportation and logistics services provider, Matson, Inc. (MATX), has increased its Q3 dividend by 30.4% to $0.30 per share. The dividend is payable on September 2 to investors of record as of August 5.

Matson also announced a buyback program to repurchase 3 million shares, which is about 7% of its outstanding shares. This represents about $190 million of buybacks as of June 24.

Matson Chairman and CEO Matt Cox said, “Last May, we successfully launched a second expedited ocean service from China to the U.S. West Coast, the CLX+, to accommodate the overwhelming demand for our original expedited China-to-long Beach service. The success of the CLX+ service is expected to continue to be a driver in free cash flow growth.” (See Matson stock chart on TipRanks)

Cox added, “After re-setting our dividend to this new level and providing maintenance capital expenditures to support ongoing operations, we will maintain our investment-grade balance sheet while also continuously seeking to acquire businesses and drive organic growth opportunities that meet our investment criteria.”

Recently, Stephens analyst Jack Atkins lowered the stock’s rating to Hold from Buy with a $70 price target (9.4% upside potential).

The other analyst covering the stock, Stifel Nicolaus’ Benjamin Nolan, on the other hand, has reiterated a Buy rating but did not assign any price target. Nolan noted that Matson’s Q1 performance was driven by higher Chinese volumes and rates coupled with higher than estimated volumes in the other three geographies. Continuing with this trend, Matson sees demand remaining buoyant through October.

The two ratings add up to a Moderate Buy consensus rating. The average Matson analyst price target of $70 implies 9.4% upside potential. Shares have gained 127.6% over the past year.

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