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 #1 (Strong 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 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
Strong Q1 and Buoyant Outlook: Celanese saw its profits surge roughly two-fold year over year in first-quarter 2018. Adjusted earnings of $2.79 per share topped the Zacks Consensus Estimate of $2.36.
Revenues climbed roughly 26% year over year to $1,851 million, also outpacing the Zacks Consensus Estimate of $1,696 million. The company benefited from gains across its Engineered Materials (EM) and Acetyl Chain units in the quarter. Improving industry fundamentals and the strength of the company’s commercial models also supported the results.
Celanese raised its earnings guidance for 2018 based on strength across its Acetyl Chain and EM units. The company now envisions its adjusted earnings per share to grow in the 20-25% range year over year in 2018, up from its earlier view of 12-16% growth.
Celanese’s board also approved a 17% hike in its quarterly cash dividend to 54 cents per share from the prior payout of 46 cents. This translates into a dividend of $2.16 per share on an annualized basis, up from $1.84 per share. The move reflects the company’s strong cash generation and its confidence in the growth prospects of its businesses.
The company’s strategic measures including operational cost savings through productivity actions and pricing initiatives are likely to lend support to its earnings in 2018.
Celanese also remains focused on growth through acquisitions. The company, in February, wrapped up its acquisition of Omni Plastics L.L.C. and its subsidiaries, including the distributor Resinal de Mexico. Omni Plastics specializes in custom compounding of various engineered thermoplastic materials, which is a material of choice in various markets including electrical and electronics, automotive, industrial and consumer goods.
The buyout reinforces Celanese’s global asset base by adding compounding capacity in the Americas, which will allow the company to continue supporting a diverse and growing customer base.
An Outperformer: Celanese has outperformed the industry it belongs to over a year. The company’s shares have gained around 29.1% over this period, compared with roughly 14.6% 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 roughly 7%.
Healthy Growth Prospects: The Zacks Consensus Estimate for earnings for second-quarter 2018 for Celanese is currently pegged at $2.30, reflecting an expected year-over-year growth of 28.5%. Moreover, earnings are expected to register a 23% growth in 2018.
Other Stocks to Consider
Other top-ranked stocks in the basic materials space include The Chemours Company (CC - Free Report) , Huntsman Corporation (HUN - Free Report) and Methanex Corporation (MEOH - Free Report) .
Chemours has an expected long-term earnings growth rate of 15.50% and flaunts a Zacks Rank #1. Its shares have gained roughly 13% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman has an expected long-term earnings growth rate of 8.3% and flaunts a Zacks Rank #1. The company’s shares have moved up around 21% in a year.
Methanex has an expected long-term earnings growth rate of 15% and carries a Zacks Rank #2. Its shares have rallied roughly 57% over a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>