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Here's Why You Should Add Celanese (CE) to Your Portfolio
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Celanese Corporation’s (CE - Free Report) shares have popped around 16% over the past six months. 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 take a look into the factors that make this leading chemical and specialty materials maker an intriguing choice for investors right now.
An Outperformer
Shares of Celanese, a Zacks Rank #2 (Buy) stock, have rallied 74% over the past year against the 14.7% decline of its industry. It has also outperformed the S&P 500’s roughly 42.3% rise over the same period.
Image Source: Zacks Investment Research
Estimates Going Up
Over the past three months, the Zacks Consensus Estimate for Celanese for the current year has increased around 19.1%. The consensus estimate for 2022 has also been revised 8.3% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Positive Earnings Surprise History
Celanese has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 17.8%, on average.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for Celanese is 30.2%, above the industry’s level of 11.2%.
Upbeat Prospects
Celanese is gaining from its productivity actions, investments in high-return organic projects and strategic acquisitions. The company is also seeing a recovery in demand across most of its end markets. It is witnessing higher demand in automotive, industrial and electronics applications.
The company remains committed to execute its productivity programs that include the implementation of a number of cost reduction capital projects. It achieved gross savings of $214 million from its productivity actions in 2020. Productivity actions are also expected to support to its margins in 2021.
Moreover, Celanese continues to actively pursue acquisitions, which are providing it opportunities for additional growth, investment and synergies. The acquisitions of SO.F.TER., Nilit and Omni Plastics are expected to contribute to earnings expansion in the company's Engineered Materials segment. The Elotex acquisition also strengthened the company’s position in the vinyl acetate ethylene emulsions space. The buyout is expected to contribute to volumes in the Acetyl Chain segment.
Celanese also continues to generate strong cash flows, lower debt levels and remains focused on returning value to its shareholders. The company, in January 2021, raised its quarterly cash dividend by 10% to 68 cents a share. Celanese also generated operating cash flow of $116 million in the first quarter. It also returned $328 million to shareholders through dividends and share repurchases during the quarter.
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , ArcelorMittal (MT - Free Report) and Cabot Corporation (CBT - Free Report) .
Nucor has a projected earnings growth rate of 344.9% for the current year. The company’s shares have surged around 136% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcelorMittal has an expected earnings growth rate of 1,163.6% for the current fiscal. The company’s shares have surged around 194% in the past year. It currently carries a Zacks Rank #1.
Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have rallied 55% in the past year. It currently carries a Zacks Rank #1.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Image: Bigstock
Here's Why You Should Add Celanese (CE) to Your Portfolio
Celanese Corporation’s (CE - Free Report) shares have popped around 16% over the past six months. 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 take a look into the factors that make this leading chemical and specialty materials maker an intriguing choice for investors right now.
An Outperformer
Shares of Celanese, a Zacks Rank #2 (Buy) stock, have rallied 74% over the past year against the 14.7% decline of its industry. It has also outperformed the S&P 500’s roughly 42.3% rise over the same period.
Estimates Going Up
Over the past three months, the Zacks Consensus Estimate for Celanese for the current year has increased around 19.1%. The consensus estimate for 2022 has also been revised 8.3% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Positive Earnings Surprise History
Celanese has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 17.8%, on average.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for Celanese is 30.2%, above the industry’s level of 11.2%.
Upbeat Prospects
Celanese is gaining from its productivity actions, investments in high-return organic projects and strategic acquisitions. The company is also seeing a recovery in demand across most of its end markets. It is witnessing higher demand in automotive, industrial and electronics applications.
The company remains committed to execute its productivity programs that include the implementation of a number of cost reduction capital projects. It achieved gross savings of $214 million from its productivity actions in 2020. Productivity actions are also expected to support to its margins in 2021.
Moreover, Celanese continues to actively pursue acquisitions, which are providing it opportunities for additional growth, investment and synergies. The acquisitions of SO.F.TER., Nilit and Omni Plastics are expected to contribute to earnings expansion in the company's Engineered Materials segment. The Elotex acquisition also strengthened the company’s position in the vinyl acetate ethylene emulsions space. The buyout is expected to contribute to volumes in the Acetyl Chain segment.
Celanese also continues to generate strong cash flows, lower debt levels and remains focused on returning value to its shareholders. The company, in January 2021, raised its quarterly cash dividend by 10% to 68 cents a share. Celanese also generated operating cash flow of $116 million in the first quarter. It also returned $328 million to shareholders through dividends and share repurchases during the quarter.
Celanese Corporation Price and Consensus
Celanese Corporation price-consensus-chart | Celanese Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Nucor Corporation (NUE - Free Report) , ArcelorMittal (MT - Free Report) and Cabot Corporation (CBT - Free Report) .
Nucor has a projected earnings growth rate of 344.9% for the current year. The company’s shares have surged around 136% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
ArcelorMittal has an expected earnings growth rate of 1,163.6% for the current fiscal. The company’s shares have surged around 194% in the past year. It currently carries a Zacks Rank #1.
Cabot has an expected earnings growth rate of around 137.5% for the current fiscal. The company’s shares have rallied 55% in the past year. It currently carries a Zacks Rank #1.
+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.
Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.
Click here to download this report FREE >>