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Ingevity (NGVT) Stock Up 25% YTD: What's Working in Favor?
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Shares of Ingevity Corporation (NGVT - Free Report) have rallied around 25% so far this year. The company has also outperformed its industry’s rise of roughly 11.7% over the same time frame.
Ingevity, a Zacks Rank #1 (Strong Buy) stock, has a market cap of roughly $4.4 billion and average volume of shares traded in the last three months was around 388.1K. The company has an expected long-term earnings per share growth rate of 12%, higher than the industry average of 10.8%.
Let’s take a look into the factors that are driving this producer of specialty chemicals and activated carbon materials.
What’s Driving NGVT?
Sustained earnings outperformance, strong execution, cost discipline and organic and inorganic initiatives have contributed to the growth story of Ingevity. The company is gaining from higher sales in oilfield industry, growth in activated carbon demand and significant synergy capture from Georgia-Pacific’s asset buyout.
Ingevity’s adjusted earnings of $1.07 per share for the fourth quarter topped the Zacks Consensus Estimate of 78 cents. The company’s revenues rose roughly 21% year over year to $278.6 million in the quarter, also coming ahead of the Zacks Consensus Estimate of $262.4 million.
Notably, Ingevity has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average positive earnings surprise being 22.8%.
Moreover, annual estimates for Ingevity have moved north over the past two months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2019 has increased by around 2.7%. The Zacks Consensus Estimate for 2020 has also moved up 1.5% over the same timeframe.
Ingevity expects sales between $1.30 billion and $1.36 billion for 2019. Adjusted EBITDA for the year has been forecast in the band of $390 million to $410 million. The company expects revenues to increase roughly 18% and earnings to rise around 25% year over year at the mid-point of its guidance factoring in its acquisition of the Capa caprolactone business.
Sales growth in the oilfield industry on the back of strong U.S. drilling is driving revenues in the company’s Performance Chemicals division as witnessed in the fourth quarter. Sales in the division’s oilfield technologies jumped roughly 53% year over year in the quarter and around 47% for full-year 2018.
Moreover, Ingevity is benefiting from its buyout of Georgia-Pacific’s pine chemicals business. The buyout contributed to strong growth in sales and EBITDA of the Performance Chemicals division in the fourth quarter.
Sustained adoption of the company’s solutions geared to meet the U.S. EPA Tier 3 and California LEV III emission regulations is also contributing to the growth in the Performance Materials segment.
Moreover, the recently completed acquisition of the Capa caprolactone business is expected to contribute to the growth of the company’s revenues and earnings in 2019. Capa is a market leader in the manufacture and commercialization of caprolactone and high-value downstream derivatives. The company expects the acquisition to be accretive to its earnings and margins in the first year.
Kirkland Lake Gold has an expected earnings growth rate of 47.1% for the current year and carries a Zacks Rank #1. Its shares have shot up around 112% in the past year.
Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2 (Buy). The company’s shares have gained around 24% over the past year.
W. R. Grace has an expected earnings growth rate of 10.4% for the current year and carries a Zacks Rank #2. Its shares have gained roughly 24% in the past year.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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Ingevity (NGVT) Stock Up 25% YTD: What's Working in Favor?
Shares of Ingevity Corporation (NGVT - Free Report) have rallied around 25% so far this year. The company has also outperformed its industry’s rise of roughly 11.7% over the same time frame.
Ingevity, a Zacks Rank #1 (Strong Buy) stock, has a market cap of roughly $4.4 billion and average volume of shares traded in the last three months was around 388.1K. The company has an expected long-term earnings per share growth rate of 12%, higher than the industry average of 10.8%.
Let’s take a look into the factors that are driving this producer of specialty chemicals and activated carbon materials.
What’s Driving NGVT?
Sustained earnings outperformance, strong execution, cost discipline and organic and inorganic initiatives have contributed to the growth story of Ingevity. The company is gaining from higher sales in oilfield industry, growth in activated carbon demand and significant synergy capture from Georgia-Pacific’s asset buyout.
Ingevity’s adjusted earnings of $1.07 per share for the fourth quarter topped the Zacks Consensus Estimate of 78 cents. The company’s revenues rose roughly 21% year over year to $278.6 million in the quarter, also coming ahead of the Zacks Consensus Estimate of $262.4 million.
Notably, Ingevity has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average positive earnings surprise being 22.8%.
Moreover, annual estimates for Ingevity have moved north over the past two months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for 2019 has increased by around 2.7%. The Zacks Consensus Estimate for 2020 has also moved up 1.5% over the same timeframe.
Ingevity expects sales between $1.30 billion and $1.36 billion for 2019. Adjusted EBITDA for the year has been forecast in the band of $390 million to $410 million. The company expects revenues to increase roughly 18% and earnings to rise around 25% year over year at the mid-point of its guidance factoring in its acquisition of the Capa caprolactone business.
Sales growth in the oilfield industry on the back of strong U.S. drilling is driving revenues in the company’s Performance Chemicals division as witnessed in the fourth quarter. Sales in the division’s oilfield technologies jumped roughly 53% year over year in the quarter and around 47% for full-year 2018.
Moreover, Ingevity is benefiting from its buyout of Georgia-Pacific’s pine chemicals business. The buyout contributed to strong growth in sales and EBITDA of the Performance Chemicals division in the fourth quarter.
Sustained adoption of the company’s solutions geared to meet the U.S. EPA Tier 3 and California LEV III emission regulations is also contributing to the growth in the Performance Materials segment.
Moreover, the recently completed acquisition of the Capa caprolactone business is expected to contribute to the growth of the company’s revenues and earnings in 2019. Capa is a market leader in the manufacture and commercialization of caprolactone and high-value downstream derivatives. The company expects the acquisition to be accretive to its earnings and margins in the first year.
Ingevity Corporation Price and Consensus
Ingevity Corporation Price and Consensus | Ingevity Corporation Quote
Stocks to Consider
Stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. , Israel Chemicals Ltd. (ICL - Free Report) and W. R. Grace & Co. . You can see the complete list of today’s Zacks #1 Rank stocks here.
Kirkland Lake Gold has an expected earnings growth rate of 47.1% for the current year and carries a Zacks Rank #1. Its shares have shot up around 112% in the past year.
Israel Chemicals has an expected earnings growth rate of 10.8% for the current year and carries a Zacks Rank #2 (Buy). The company’s shares have gained around 24% over the past year.
W. R. Grace has an expected earnings growth rate of 10.4% for the current year and carries a Zacks Rank #2. Its shares have gained roughly 24% in the past year.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>