CompX International: A Steady Dividend Beacon in a Volatile Market

Income-focused investors face a dilemma: how to secure reliable dividends in an era of rising rates, supply chain disruptions, and geopolitical uncertainty. CompX International (NYSE: CIX) emerges as a compelling candidate, offering a 4.62% dividend yield, consistent payouts, and a business model resilient to macroeconomic headwinds. Let’s dissect why this industrial powerhouse is primed for long-term income generation—and when to act.

Q1 2025 Results: A Strong Foundation for Dividend Sustainability

CompX delivered a standout quarter, with net sales rising 6% year-over-year to $40.3 million, driven by robust demand in its Marine Components and Security Products segments. Net income surged 37.8% to $5.1 million, while earnings per share (EPS) climbed to $0.42, up 35.5% from 2024. This growth isn’t just a flash in the pan—operating income hit $5.9 million, a 60% jump from the prior year, signaling enhanced profitability.

Dividend Sustainability: Payout Ratio Holds Steady, Coverage Is Strong

The $0.30 quarterly dividend (yielding 4.62%) remains firmly within CompX’s capacity to sustain. While the reported 82% payout ratio (dividends divided by net income) might raise eyebrows, the math tells a different story:
- Q1 2025 cash flow from operations was $3.6 million, covering the $3.7 million dividend obligation at 77.1% cash payout ratio—a healthier metric than net income alone.
- Earnings growth is outpacing dividends: The dividend per share has been flat at $0.30 since Q2 2024, while EPS rose from $0.31 to $0.42. This widening margin suggests room to grow payouts without overextending.

Valuation: A Bargain for Income Investors

At a current price of $65.00 (as of May 2025), CompX trades at a 15.5x forward P/E ratio, well below its five-year average of 20x. With earnings growth averaging +12% annually over the past three years, this valuation gap presents a buy signal.

The dividend yield of 4.62% also compares favorably to the broader market, which averages 1.8%, and even outperforms many utilities and real estate stocks. Meanwhile, the low debt-to-equity ratio (0.3x) reduces refinancing risks in a high-rate environment.

Risks? Yes—but Manageable

CompX isn’t immune to macro challenges:
- Raw material costs and supply chain volatility could pressure margins.
- Global competition, particularly from low-cost manufacturers in China, remains a threat.

However, the company’s strategic focus on niche markets (e.g., government security contracts and specialized marine equipment) creates a moat against commoditization. Management has also prioritized operational efficiency, with gross margins expanding to 28% in Q1 2025—a 5% improvement year-over-year.

When to Buy: The Sweet Spot for Income Hunters

The ideal entry point is now. CompX’s stock has corrected 12% from its 52-week high, offering a risk/reward sweet spot. Pair this with the $0.30 dividend, payable on June 17, 2025, to lock in immediate income.

Final Take: A Dividend Machine Worth Owning

CompX International checks all the boxes for income investors: a sustainable dividend, strong cash flow, and defensible market positions. With valuation metrics screaming “buy” and a payout ratio comfortably covered by earnings and cash flow, this stock is a must-own for portfolios seeking stability and income growth.

Action Item: Initiate a position in CIX before its next ex-dividend date (June 9, 2025) to secure the $0.30 dividend and capitalize on a stock trading at a discount to its growth potential. This is a rare blend of income and value in an uncertain market—don’t miss it.