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6 Reasons to Add Albemarle (ALB) Stock to Your Portfolio
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Albemarle (ALB - Free Report) has been performing well of late, scaling new highs following its forecast-topping results in fourth-quarter 2016. The company has a market capitalization of $11.7 billion and is a premier specialty chemicals maker with leading positions in attractive end markets globally.
Albemarle, a Zacks Rank #2 (Buy) stock, has seen its shares pop roughly 23% year to date. If you haven’t taken advantage of the share price appreciation yet, the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
What’s Working in Favor of Albemarle?
An Outperformer: Albemarle has significantly outperformed the Zacks categorized Chemicals-Diversified industry over a year, partly reflecting its forecast-topping earnings performance and its strategic growth initiatives. The company’s shares have gained around 62.5% over this period, compared with roughly 16.8% gain recorded by the industry.
Estimates Moving Up: Annual estimates for Albemarle have moved north over the past 60 days, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2017 has increased by around 4.3% to $4.17 per share. The Zacks Consensus Estimate for 2018 has also moved up 3.4% over the same timeframe to $4.82.
Positive Earnings Surprise History: Albemarle has an impressive earnings surprise history, outpacing the Zacks Consensus Estimate in all the trailing four quarters, delivering a positive average earnings surprise of 14.3%.
Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for 2017 is currently pegged at $4.17, reflecting an expected year-over-year growth of 16.7%. Moreover, earnings are expected to register a 15.7% growth in 2018. The stock also has a long-term (3-5 years) expected expected earnings per share (EPS) growth rate of roughly 13.8%, higher than the industry average of 10.4%.
Impressive Capital Deployment: Albemarle remains committed to deliver incremental returns to shareholders, leveraging healthy cash flows. The company, in Feb 2017, raised its quarterly dividend by 5% to 32 cents per share. The hike represents the 23rd straight year of dividend increase by the company. Albemarle’s operating cash flows for 2016 surged 103% year over year to a record $733 million.
Upbeat Outlook: Albemarle, in its fourth-quarter 2016 call, noted that its performance in 2016 and strategic initiatives have positioned it for strong growth in 2017. Albemarle sees net sales of $2.8-$2.95 billion and adjusted earnings per share of $4.00-$4.25 for 2017, reflecting an increase from sales of around $2.7 billion and adjusted earnings of $3.57 per share it registered in 2016. Moreover, the company expects adjusted EBITDA for 2017 to be between $800 million and $840 million, also higher than $758.2 million logged in 2016.
Albemarle remains focused on strengthening its lithium business. It is well placed to leverage strong expected growth in the battery-grade lithium market. The company recently said that its Talison joint venture in Australia has approved the expansion of lithium concentrate production at its Greenbushes mine. The expansion will more than double the lithium carbonate equivalent capacity at Greenbushes from 80,000 metric tons per year to more than 160,000 metric tons.
Moreover, the acquisition of the lithium assets of Jiangxi Jiangli New Materials Science and Technology Co. Ltd. has allowed Albemarle to supply premium lithium salts to an expanded global customer base and accelerated the company’s ability to meet its goal of capturing 50% of the growth in the lithium industry.
Chemours has an expected long-term growth of 15.5%.
Kronos has an expected long-term growth of 5%.
Sinopec Shanghai has an expected long-term growth of 14.2%.
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While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public. Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>
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6 Reasons to Add Albemarle (ALB) Stock to Your Portfolio
Albemarle (ALB - Free Report) has been performing well of late, scaling new highs following its forecast-topping results in fourth-quarter 2016. The company has a market capitalization of $11.7 billion and is a premier specialty chemicals maker with leading positions in attractive end markets globally.
Albemarle, a Zacks Rank #2 (Buy) stock, has seen its shares pop roughly 23% year to date. If you haven’t taken advantage of the share price appreciation yet, the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
What’s Working in Favor of Albemarle?
An Outperformer: Albemarle has significantly outperformed the Zacks categorized Chemicals-Diversified industry over a year, partly reflecting its forecast-topping earnings performance and its strategic growth initiatives. The company’s shares have gained around 62.5% over this period, compared with roughly 16.8% gain recorded by the industry.
Estimates Moving Up: Annual estimates for Albemarle have moved north over the past 60 days, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2017 has increased by around 4.3% to $4.17 per share. The Zacks Consensus Estimate for 2018 has also moved up 3.4% over the same timeframe to $4.82.
Positive Earnings Surprise History: Albemarle has an impressive earnings surprise history, outpacing the Zacks Consensus Estimate in all the trailing four quarters, delivering a positive average earnings surprise of 14.3%.
Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for 2017 is currently pegged at $4.17, reflecting an expected year-over-year growth of 16.7%. Moreover, earnings are expected to register a 15.7% growth in 2018. The stock also has a long-term (3-5 years) expected expected earnings per share (EPS) growth rate of roughly 13.8%, higher than the industry average of 10.4%.
Impressive Capital Deployment: Albemarle remains committed to deliver incremental returns to shareholders, leveraging healthy cash flows. The company, in Feb 2017, raised its quarterly dividend by 5% to 32 cents per share. The hike represents the 23rd straight year of dividend increase by the company. Albemarle’s operating cash flows for 2016 surged 103% year over year to a record $733 million.
Upbeat Outlook: Albemarle, in its fourth-quarter 2016 call, noted that its performance in 2016 and strategic initiatives have positioned it for strong growth in 2017. Albemarle sees net sales of $2.8-$2.95 billion and adjusted earnings per share of $4.00-$4.25 for 2017, reflecting an increase from sales of around $2.7 billion and adjusted earnings of $3.57 per share it registered in 2016. Moreover, the company expects adjusted EBITDA for 2017 to be between $800 million and $840 million, also higher than $758.2 million logged in 2016.
Albemarle remains focused on strengthening its lithium business. It is well placed to leverage strong expected growth in the battery-grade lithium market. The company recently said that its Talison joint venture in Australia has approved the expansion of lithium concentrate production at its Greenbushes mine. The expansion will more than double the lithium carbonate equivalent capacity at Greenbushes from 80,000 metric tons per year to more than 160,000 metric tons.
Moreover, the acquisition of the lithium assets of Jiangxi Jiangli New Materials Science and Technology Co. Ltd. has allowed Albemarle to supply premium lithium salts to an expanded global customer base and accelerated the company’s ability to meet its goal of capturing 50% of the growth in the lithium industry.
Other Stocks Worth a Look
Beyond Albemarle, investors should also consider other stocks in the chemical space such as The Chemours Company (CC - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Sinopec Shanghai Petrochemical Company Limited (SHI - Free Report) , all holding a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected long-term growth of 15.5%.
Kronos has an expected long-term growth of 5%.
Sinopec Shanghai has an expected long-term growth of 14.2%.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public. Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>