Published Thu, 21 May 2020 18:29:35 -0400 on Seeking Alpha
MSA Safety is now a Dividend King, having raised the dividend for 50+ years in a row.
The company is a market leader in workplace safety products.
The dividend is very safe from the perspective of earnings and free cash flow.
The stock is overvalued at the moment.
Introduction and Thesis
MSA Safety Incorporated (MSA) is now a Dividend King. The company raised the regular quarterly cash dividend 2.4% to $0.43 per share. The annual forward dividend is now $1.72 per share. This is the 50th consecutive annual increase, making the company a Dividend King. There are now 30 Dividend Kings out of about 4,300 publicly traded stocks in the U.S. For dividend growth investors, there is a lot to like here. The company is committed to the dividend and increases it slowly each year. This has the benefit of keeping the dividend sustainable in a cyclical industry. MSA also has market leading positions in several safety technologies. The company continues to grow through acquisitions and organically. Margins are also trending up. Overall, I like MSA Safety. But the stock is overvalued at this point and investors should wait for a better entry point. Hence, I am neutral on MSA Safety at the moment.
Source: MSA Safety Investor Presentation May 2020
Overview of MSA Safety
MSA Safety traces its history to 1914 and was founded after a mine accident in 1912. The company defines its mission as "That men and women may work in safety and that they, their families, and their communities may live in health throughout the world." Although MSA traces its history to mine safety, it is now much more diversified. Today, it produces and sells safety products for firefighters, the oil and gas industry, the petrochemical industry, the construction industry, mining, utilities, and the military. The company has the No. 1 market position in self-contained breathing apparatus (SCBA), firefighter helmets and protective apparel, fixed gas and flame detection, and industrial head... Read more