Lubrizol Corp.

Lubrizol Corp. (LZ) sports attractive fundamentals. The company’s return on equity (ROE) of 15% more than doubles the industry average of 7%. Its dividend yield of 3.9% soars past the industry average of 0.5%.

Company Description

Lubrizol Corp. is a global provider of specialty chemicals and materials for a wide variety of markets and end-use applications, such as lubricant additives for engine oils, other transportation-related fluids and industrial lubricants. The company also provides fuel additives for gasoline and diesel fuel. Headquartered in Wickliffe, Ohio and founded in 1928, Lubrizol owns and operates manufacturing facilities in 19 countries. The company also has sales and technical offices around the world. Revenues for 2007 totaled $4.5 billion.

Growth Through Product Expansion

The company recently expanded its Estane® Engineered Polymers product line with the purchase of the thermoplastic polyurethane (TPU) and conductive polymer business and assets from SK Chemicals Co., Ltd., a global leader in specialty chemicals and life sciences. LZ stated that inn 2007 this business had annualized revenues of approximately $30 million.

“The combination of SK Chemicals’ market presence in Asia Pacific, in particular Korea, along with Lubrizol’s significant global position creates synergies and expanded product offerings that we believe will benefit all of our customers,” said Mike Vaughn, Lubrizol vice president, Estane Engineered Polymers.

Solid Income

Lubrizol declared a regular quarterly dividend of 31 cents per share in late September. The company noted that the dividend is payable December 10 to shareholders of record at the close of business on November 10. LZ’s dividend yield of 3.9% soars past the industry average of 0.5%.

Growth in the Second Quarter

In late July, the company announced second-quarter earnings of $1.26 per share, outpacing the year-prior $1.17 and exceeding the consensus estimate by 18%. LZ has topped analysts estimates by an average of 11% over the past 5 consecutive quarters.

Revenues jumped 17% to a record $1.35 billion on a year-over-year basis.

Commenting on the results, CEO James Hambrick stated, “I am pleased with our solid second quarter and first half performance considering the economic and competitive challenges that we faced. We have been able to maintain our earnings momentum during a time of rapidly rising material costs and very high production rates, demonstrating excellent commercial and operational execution.”

Analysts See Further Growth

Wall Street sees Lubrizol’s annual earnings per share growing 11% for 2008.

The Third-quarter Report is Around the Corner

Results for the third quarter are scheduled for release on October 30.

Read the full analyst report on LZ