Supremex Inc. Announces CA$0.04 Per Share Dividend with 4.1% Yield

Supremex Inc. announces a dividend of CA$0.04 per share with a 4.1% dividend yield, underscoring its strong financial position. The company's Q1 2024 earnings show sequential increases in adjusted EBITDA and net earnings, driven by its Envelope business.

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Supremex Inc. Announces CA$0.04 Per Share Dividend with 4.1% Yield

Supremex Inc. Announces CA$0.04 Per Share Dividend with 4.1% Yield

Supremex Inc., a leading North American manufacturer and marketer of envelopes and paper-based packaging solutions, has announced a dividend of CA$0.04 per share, with an attractive 4.1% dividend yield. The company's strong financial position, with the dividend comfortably covered by cash flow and earnings, call, underscores its commitment to delivering value to shareholders.

Why this matters: This dividend announcement has implications for investors seeking stable income streams and highlights the company's confidence in its financial performance. As a leading manufacturer in the industry, Supremex's financial health can also impact the broader packaging and paper products market.

During the Q1 2024 earnings conference call on May 9, 2024, President and CEO Stewart Emerson expressed optimism about the company's performance, stating, "We are encouraged with our first quarter performance, which is highlighted by sequential increases in adjusted EBITDA and net earnings when compared to the fourth quarter of last year." Emerson noted that Supremex's Envelope business has seen a sequential increase in revenue, with the direct mail market appearing to have bottomed out, although the fundraising vertical remains lethargic.

Supremex's strategic acquisition of Forest Envelope, a regional specialty envelope manufacturer, is expected to strengthen its market position. The company plans to integrate Forest Envelope into its existing Chicago land footprint, leveraging synergies and expanding its product offerings.

The company's financial performance has been resilient, with the Envelope segment's EBITDA surpassing the 20% threshold in Q1 2024, a feat only accomplished during the irrational exuberance period of 2022 and Q1 2023. However, the Packaging business remains soft, especially for markets tied to discretionary spending and the ebbs and flows of the economy.

Looking ahead, Supremex anticipates a potential 41.7% EPS growth over the next year, driven by operational efficiencies, strategic acquisitions, and a gradual recovery in key markets. As the company navigates the evolving business landscape, its focus on innovation, cost optimization, and customer service positions it well for sustainable growth and value creation for shareholders.

Key Takeaways

  • Supremex announces CA$0.04 dividend per share with 4.1% yield.
  • Dividend is comfortably covered by cash flow and earnings.
  • Q1 2024 earnings show sequential increases in adjusted EBITDA and net earnings.
  • Strategic acquisition of Forest Envelope to strengthen market position.
  • 41.7% EPS growth expected over next year driven by operational efficiencies.