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Here's Why You Should Add Celanese (CE) to Your Portfolio
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Celanese Corporation (CE - Free Report) stock looks promising at the moment. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical maker an intriguing choice for investors right now.
What’s Working in Favor of CE?
Solid Rank & VGM Score: Celanese currently has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Celanese has outperformed the industry it belongs to over a year. The company’s shares have rallied around 30% over this period, compared with roughly 26% gain recorded by the industry.
Positive Earnings Surprise History: Celanese has an impressive earnings surprise history. The company has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 2.5%.
Attractive Valuation: Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, Celanese is currently trading at trailing 12-month EV/EBITDA multiple of 14.3, cheaper compared with the industry average of 20.7.
Superior Return on Equity (ROE): Celanese’s ROE of 32%, as compared with the industry average of 11.2%, manifests the company’s efficiency in utilizing shareholder’s funds.
Growth Drivers in Place: Celanese’s strategic initiatives, including operational cost savings through productivity actions and efficiency enhancement, are driving its earnings.
Furthermore, the company is well placed to gain from acquisitions and its acetate tow joint venture (JV) with Blackstone. Notably, the purchase of Italy-based SO.F.TER. Group has strengthened Celanese’s solutions capability and project pipeline. SO.F.TER. Group’s modern manufacturing facilities and product portfolio will offer opportunities for additional growth, investment and synergies. The acquisition of Nilit's nylon compounding unit is also in sync with Celanese’s plans to become a leading nylon compound supplier, globally.
Moreover, in June 2017, Celanese and funds managed by Blackstone entered into an agreement to form a JV. This, in turn, is likely to create a global acetate tow supplier where the former will own 70% of the JV and Blackstone the remaining 30%.
The JV will have an expanded global production footprint, including eight fully-owned manufacturing plants and three existing JV sites. The new company will be well placed to address customers’ needs more efficiently and offer the best of quality and services.
Moreover, Celanese remains committed to expand capacity. The company, in October 2017, declared its plans to expand the capacity of certain product-specific manufacturing production sites and global compounding assets to augment growth in its engineered materials business. It will also be adding production lines in China, the United States and Italy that are expected to raise compounding capacity by around 100 kilo tons per year.
Methanex has an expected long-term earnings growth of 15%. Its shares are up roughly 32% over a year.
Huntsman has an expected long-term earnings growth of 8%. The stock has gained around 73% over a year.
Air Products has an expected long-term earnings growth of 14.1%. The stock has gained around 15% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Here's Why You Should Add Celanese (CE) to Your Portfolio
Celanese Corporation (CE - Free Report) stock looks promising at the moment. We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s delve deeper into the factors that make this chemical maker an intriguing choice for investors right now.
What’s Working in Favor of CE?
Solid Rank & VGM Score: Celanese currently has a Zacks Rank #2 (Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2, offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
An Outperformer: Celanese has outperformed the industry it belongs to over a year. The company’s shares have rallied around 30% over this period, compared with roughly 26% gain recorded by the industry.
Positive Earnings Surprise History: Celanese has an impressive earnings surprise history. The company has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 2.5%.
Attractive Valuation: Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, Celanese is currently trading at trailing 12-month EV/EBITDA multiple of 14.3, cheaper compared with the industry average of 20.7.
Superior Return on Equity (ROE): Celanese’s ROE of 32%, as compared with the industry average of 11.2%, manifests the company’s efficiency in utilizing shareholder’s funds.
Growth Drivers in Place: Celanese’s strategic initiatives, including operational cost savings through productivity actions and efficiency enhancement, are driving its earnings.
Furthermore, the company is well placed to gain from acquisitions and its acetate tow joint venture (JV) with Blackstone. Notably, the purchase of Italy-based SO.F.TER. Group has strengthened Celanese’s solutions capability and project pipeline. SO.F.TER. Group’s modern manufacturing facilities and product portfolio will offer opportunities for additional growth, investment and synergies. The acquisition of Nilit's nylon compounding unit is also in sync with Celanese’s plans to become a leading nylon compound supplier, globally.
Moreover, in June 2017, Celanese and funds managed by Blackstone entered into an agreement to form a JV. This, in turn, is likely to create a global acetate tow supplier where the former will own 70% of the JV and Blackstone the remaining 30%.
The JV will have an expanded global production footprint, including eight fully-owned manufacturing plants and three existing JV sites. The new company will be well placed to address customers’ needs more efficiently and offer the best of quality and services.
Moreover, Celanese remains committed to expand capacity. The company, in October 2017, declared its plans to expand the capacity of certain product-specific manufacturing production sites and global compounding assets to augment growth in its engineered materials business. It will also be adding production lines in China, the United States and Italy that are expected to raise compounding capacity by around 100 kilo tons per year.
Celanese Corporation Price and Consensus
Celanese Corporation Price and Consensus | Celanese Corporation Quote
Other Stocks to Consider
Other stocks worth considering in the basic materials space include Methanex Corporation (MEOH - Free Report) , Huntsman Corporation (HUN - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) . While Methanex carries a Zacks Rank #1, both Huntsman and Air Products sport a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Methanex has an expected long-term earnings growth of 15%. Its shares are up roughly 32% over a year.
Huntsman has an expected long-term earnings growth of 8%. The stock has gained around 73% over a year.
Air Products has an expected long-term earnings growth of 14.1%. The stock has gained around 15% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>