From Scotia this morning OUR TAKE: Positive. 4Q EBITDA and EPS beat consensus by 5% and 13%. The beat was primarily driven by higher-than-expected sales. Following several years of improved financial performance and debt repayment, WJX raised its dividend 32% (~5.5% dividend yield; ~40% payout based on EPS).
Since 2019, WJX generated FCF of ~$290 million (or ~$13.25/share). It reduced its net debt leverage to 1.1x from 2.6x. Its IP and ERS business grew nearly 60%. With its 2022 EPS exceeding $3/share, IP and ERS providing a more durable earnings outlook, and its leverage ratio at a decade-low, we think WJX is in a position to comfortably raise its dividend and accelerate its M&A strategy. WJX trades at 7.6x P/E on our 2023E (versus historical average of 10.0x) and 1.2x P/B. We expect the shares to perform well following the release. We will update our forecasts following the investor call tomorrow at 2:00 p.m. EST (dial in 1-888-664-6392).