Back to top

Eastman Chemical Hikes Dividend for Eighth Straight Year

Read MoreHide Full Article
Eastman Chemical Company’s (EMN - Free Report) board announced a quarterly cash dividend of 56 cents per common share, a 10% increase from the prior payout of 51 cents. The dividend is payable on Jan 5, 2018, to shareholders of record as of Dec 18, 2017.
 
This marks the eighth straight year for which the chemical maker has raised its dividend as part of its commitments to return cash to shareholders.
 
Eastman Chemical remains focused on boosting shareholder returns. The company generated operating cash flows of $528 million during the third quarter and returned $100 million to shareholders through share repurchases in the quarter. It also returned around $498 million (including $223 million in dividends) to its shareholders during first nine months of 2017. 
 
Eastman Chemical has underperformed the industry it belongs to over a year. The company’s shares have moved up 18.5% over this period, compared with roughly 20.1% gain recorded by the industry. 
 
 
 
The company expects to drive growth on the back of innovation and high margin products amid an uncertain global business environment. Eastman Chemical expects adjusted earnings per share growth in 2017 to be toward the top end of the earlier projected range of 10-12% year over year, excluding the financial impact of the Kingsport operational incident.
 
The company’s Kingsport coal gasification area suffered an operational incident on Oct 4. However, there were no reports of any adverse impact on the environment or on human health. The company noted that all areas of the manufacturing facility have resumed operations with the exception of coal gasification operations. 
 
Though Eastman Chemical is still assessing the financial impact of the incident, it is expected to reduce operating earnings to $50-100 million. The company expects costs associated with the incident to be around $100 million in the fourth quarter.
 
Eastman Chemical remains focused on cost-cutting and productivity actions. The company should also gain from its strategic acquisitions. It also remains committed to reduce debt. 

AutoNation, Inc. Price and Consensus
 

AutoNation, Inc. Price and Consensus | AutoNation, Inc. Quote

 

Zacks Rank & Stocks to Consider

Eastman Chemical currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kronos Worldwide Inc. (KRO - Free Report) , Koppers Holding Inc. (KOP - Free Report) and Westlake Chemical Corporation (WLK - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kronos Worldwide has expected long-term earnings growth of 5%. Its shares have gained 112% year to date.

Koppers has expected long-term earnings growth of 18%. Its shares have rallied 23% year to date.

Westlake Chemical has expected long-term earnings growth of 10.6%. Its shares have moved up 77.5% year to date.

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 >>



More from Zacks Analyst Blog

You May Like