Innospec Inc. (IOSP Quick QuoteIOSP - Free Report) looks promising at the moment. It is benefiting from strong growth in its Oilfield Services unit and strategic growth measures. 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.

Innospec 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.

Let’s take a look into the factors that make this specialty chemicals company an attractive choice for investors right now.

Price Performance

Innospec has outperformed the industry it belongs to over the past year. Shares of IOSP have gained 13.8% over a year against the 8.9% rise of its industry.

Image Source: Zacks Investment Research

Positive Earnings Surprise History

Innospec has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 11.9%, on average.

Estimates Going Up

Over the past two months, the Zacks Consensus Estimate for IOSP for 2023 has increased around 0.7%. The consensus estimate for 2024 has also been revised 2.2% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Strategic Actions, Strength in Oilfield Services Bode Well 

Innospec is witnessing a recovery in its businesses from the pandemic-led slowdown. It remains focused on technology development and margin improvement to drive organic growth across its balanced and diversified business portfolio.

IOSP’s investment in capacity expansion will also offer incremental growth opportunities in this business. New contracts in personal care are expected to drive the company’s Performance Chemicals division. Its Fuel Specialties unit is benefiting from the expansion of technologies in areas such as renewable diesel, low-sulfur marine fuel and gasoline direct injection engines. Pricing actions are also contributing to margin improvement.

Innospec is also seeing strength in the Oilfield Services unit, driven by production chemicals. Strong growth in Oilfield Services led to an 8% growth in its revenues in the last reported quarter. The company is executing operating income and margin expansion opportunities in this business.

Stocks to Consider

Better-ranked stocks worth considering in the basic materials space include L.B. Foster Company (FSTR Quick QuoteFSTR - Free Report) , Gold Fields Limited (GFI Quick QuoteGFI - Free Report) , and Linde plc (LIN Quick QuoteLIN - Free Report) .

L.B. Foster currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for FSTR's current-year earnings has been stable over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

L.B. Foster’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 140.5%, on average. FSTR has gained around 7% in a year.

Gold Fields currently carries a Zacks Rank #1. The Zacks Consensus Estimate for GFI’s current-year earnings has been revised 4% upward in the past 60 days.

The consensus estimate for current-year earnings for GFI is currently pegged at $1.05, reflecting an expected year-over-year growth of 8.3%. Gold Fields’ shares have rallied roughly 51% in the past year.

Linde currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.4% upward in the past 60 days.

Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. LIN’s shares have shot up roughly 29% in the past year.