Myers Industries: A High-Yield Gamble in a Volatile Market?

For income-focused investors craving yield in a low-interest-rate environment, Myers Industries (MYE) has become a tantalizing name. With a dividend yield of 3.28% as of September 2025 [2], it dwarfs the S&P 500’s 0.8% average and outpaces peers like 3M and Owens Corning. But here’s the rub: MYE’s payout ratio—currently hovering near 207% of earnings [1]—is a red flag that screams caution. This is a stock that’s paying out more in dividends than it’s earning, a recipe for disaster if cash flow doesn’t improve. So, is this a golden opportunity or a ticking time bomb? Let’s break it down.

The Allure of the Yield

Myers Industries has maintained a quarterly dividend of $0.135 per share since at least 2020, translating to an annualized $0.54 payout [3]. That consistency is rare in today’s market, where companies are slashing dividends to survive. For retirees or yield-hungry portfolios, this 3.28% yield is a siren song. But as the old adage goes, “If it sounds too good to be true, it probably is.”

The company’s free cash flow in Q2 2025 was a modest $25 million [4], which technically covers the dividend (annualized $25M vs. $0.54/share). However, the payout ratio based on earnings—207%—is unsustainable. This disconnect between cash flow and earnings highlights a critical risk: Myers is relying on cash reserves and operational efficiencies to fund its dividend, not consistent profitability.

Strategic Moves to Stabilize the Ship

Myers isn’t blind to these risks. In Q2 2025, the company announced a strategic review of its Myers Tire Supply (MTS) business and the consolidation of two underperforming production facilities in Ohio [5]. These moves are part of a broader “Focused Transformation” program aimed at cutting $20 million in costs by year-end. CEO Aaron Schapper has called this a “make-or-break” moment, and the results so far are promising: $15 million in annualized savings through mid-2025 [5].

The military and industrial segments are also showing promise. Scepter® military products are driving strong demand, with full-year 2025 sales expected to exceed $40 million [5]. If Myers can pivot toward these higher-margin markets while divesting underperforming assets like MTS, its cash flow could stabilize. Analysts project a dramatic improvement in the payout ratio to 46% in 2026 [1], assuming earnings rebound as expected.

The Risks That Can’t Be Ignored

Let’s not sugarcoat it: Myers is walking a tightrope. Its debt-to-equity ratio of 0.68 [3] isn’t catastrophic, but combined with a payout ratio above 200%, it raises questions about liquidity. If interest rates rise or a recession hits, Myers could face a cash crunch. The company’s Q2 2025 revenue fell 4.8% year-over-year due to weak demand in the automotive aftermarket [4], a sector that’s notoriously cyclical.

Analysts are split. While the consensus rating is “Buy” with a $21 price target [2], others warn that the dividend is a “high-risk, high-reward proposition.” The key will be whether Myers can execute its cost-cutting and diversification plans without sacrificing growth.

Final Verdict: A High-Yield Gamble

For conservative income investors, MYE is a no-go. The payout ratio is too high, and the business model is too fragile. But for those willing to take on risk for a fat yield, Myers could be a compelling play—if management delivers on its promises. The company’s free cash flow coverage of the dividend and its strategic pivot toward military/industrial markets offer a lifeline.

Source:
[1] Myers Industries (MYE) Dividend Yield 2025, Date & History [https://www.marketbeat.com/stocks/NYSE/MYE/dividend/]
[2] Myers Industries (MYE) Dividend History, Dates & Yield [https://stockanalysis.com/stocks/mye/dividend/]
[3] Myers Industries Announces Second Quarter 2025 Results [https://investor.myersindustries.com/news/press-release-details/2025/Myers-Industries-Announces-Second-Quarter-2025-Results-and-Launches-Strategic-Review-of-Myers-Tire-Supply/default.aspx]
[4] Earnings call transcript: Myers Industries Q2 2025 results [https://www.investing.com/news/transcripts/earnings-call-transcript-myers-industries-q2-2025-results-miss-forecasts-stock-dips-93CH-4163747]
[5] Myers Industries Announces Second Quarter 2025 Results and Launches Strategic Review of Myers Tire Supply [https://investor.myersindustries.com/news/press-release-details/2025/Myers-Industries-Announces-Second-Quarter-2025-Results-and-Launches-Strategic-Review-of-Myers-Tire-Supply/default.aspx]