Huntsman's Dividend at Risk: Article Flags Unsustainable Payout

What happened

A 247 Wall St article has singled out Huntsman as one of five dividend stocks flashing warning signs, noting its payout exceeds earnings and cash flow—a view consistent with DeepValue's analysis. The firm cut its quarterly dividend by 65% in 2025 to conserve cash, yet the article warns that such cuts often fail to fix underlying problems. With net losses continuing through 9M25, negative interest coverage, and net debt/EBITDA of 5.8x, the dividend remains at risk. DeepValue's $6.3 DCF intrinsic value versus a ~$10.4 share price suggests the stock still lacks a margin of safety. The article adds external confirmation to an already cautious thesis: Huntsman's financial strain is acute, and the dividend is not secure.

Implication

The article reinforces DeepValue's WAIT stance. Despite a 46% price decline, Huntsman still trades above a conservative DCF value of ~$6.3, while leverage and negative interest coverage leave the dividend vulnerable. Investors should wait for either a cheaper entry point near book value (<$9) or clearer evidence of a sustainable earnings recovery before considering a position. The dividend cut is a stopgap, not a solution.

Thesis delta

The article does not change the fundamental thesis but adds external validation of Huntsman's dividend unsustainability. The key shift: the market has not fully discounted the risk of further dividend reductions or balance sheet stress, as the stock still prices in a recovery that may not materialize. Patience remains warranted.