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Celanese (CE) Stock Up 31% in a Year: What's Driving It?
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Shares of Celanese Corporation (CE - Free Report) have rallied around 31% over a year. The company has also outperformed its industry’s growth of roughly 8% to over the same time frame.
Celanese, a Zacks Rank #1 (Strong Buy) stock, has a market cap of roughly $15.6 billion. Average volume of shares traded in the last three months is around 763.7k. The company has expected long-term earnings per share growth rate of 8.9%.
Let’s take a look into the factors that are driving this chemical maker’s stock.
Driving Factors
Better-than-expected earnings performance, upbeat outlook for 2018 and compelling prospects have contributed to the rally in Celanese’s shares.
Celanese’s profits for first-quarter 2018 shot up roughly two-fold year over year as 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. Adjusted earnings of $2.79 per share for the quarter topped the Zacks Consensus Estimate of $2.36.
Notably, Celanese has delivered positive earnings surprises in each of the trailing four quarters, with an average positive surprise of 7%.
Celanese, in April, 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 acquisition bolsters 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.
FMC has an expected long-term earnings growth rate of 14.3%. Its shares have gained roughly 17% over a year.
Chemours has an expected long-term earnings growth rate of 15.5%. The company’s shares have rallied around 25% in a year.
Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have shot up roughly 91% over a year.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Celanese (CE) Stock Up 31% in a Year: What's Driving It?
Shares of Celanese Corporation (CE - Free Report) have rallied around 31% over a year. The company has also outperformed its industry’s growth of roughly 8% to over the same time frame.
Celanese, a Zacks Rank #1 (Strong Buy) stock, has a market cap of roughly $15.6 billion. Average volume of shares traded in the last three months is around 763.7k. The company has expected long-term earnings per share growth rate of 8.9%.
Let’s take a look into the factors that are driving this chemical maker’s stock.
Driving Factors
Better-than-expected earnings performance, upbeat outlook for 2018 and compelling prospects have contributed to the rally in Celanese’s shares.
Celanese’s profits for first-quarter 2018 shot up roughly two-fold year over year as 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. Adjusted earnings of $2.79 per share for the quarter topped the Zacks Consensus Estimate of $2.36.
Notably, Celanese has delivered positive earnings surprises in each of the trailing four quarters, with an average positive surprise of 7%.
Celanese, in April, 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 acquisition bolsters 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.
Celanese Corporation Price and Consensus
Celanese Corporation Price and Consensus | Celanese Corporation Quote
Stocks to Consider
Stocks worth considering in the basic materials space include FMC Corporation (FMC - Free Report) , The Chemours Company (CC - Free Report) and Westlake Chemical Corporation (WLK - Free Report) , each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
FMC has an expected long-term earnings growth rate of 14.3%. Its shares have gained roughly 17% over a year.
Chemours has an expected long-term earnings growth rate of 15.5%. The company’s shares have rallied around 25% in a year.
Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have shot up roughly 91% over a year.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>