Does 9% Dividend Yield, Herculean Cost Cutting Make Pitney Bowes Worth a Look?
Postal Meters, the historical sales champ at Pitney Bowes (PBI), are sadly tied to the shrinking U.S. Post Service, and investors have taken notice and driven shares of the company steadily downward. Pitney Bowes management, though, isn’t giving up, launching products and cutting costs aggressively, and what braver front can a company display than a rising dividend?
The dividend yield, of course, is into nutty territory because investors doubt the company’s long-term survival. With reason.
In seven sales categories during the first quarter, revenue declined in six of them, rising every-so-slightly in the relatively small software line. Turning that around is crucial. In the meantime, though, Pitney Bowes is showing it can cut cost to remain profitable, not an easy task at a shrinking company.
The dividend is tempting, of course. But you’d be nuts to dive in without a thorough reading of the 10-K and only if you’re convinced CEO Murray Martin can restart growth.
Filed under: Company Analysis