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Univar Extends Castrol Oil Deal, Boosts Product Portfolio

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Univar Inc.’s (UNVR - Free Report) fully-owned subsidiary, Univar Specialty Consumables Ltd., has extended its deal with Castrol Oil Company to distribute its array of industrial greases and lubricants.

The move enables the company to combine Castrol's portfolio with its sales team's technical expertise and provide a comprehensive suite of machinery solutions to customers. This will help to reduce service intervals and service costs. The deal bolsters Univar's product portfolio with one of the biggest brands in the lubricant space and also expand reach into new markets.

Castrol’s global R&D centers are focused on innovation and testing of many new products every year. It works with leading industry producers to supply a wide range of lubricants designed for specific environments and operating conditions. This allows customers to select the right lubricant for appropriate application and experience consistent performance at an affordable price.  

Univar Specialty Consumables supplies high-quality consumable solutions from a group of industry-leading producers. Moreover, part of Univar's value-added services include oil-condition monitoring test, which enables customers to assess whether an alternative machine lubricant could improve longevity and performance for the application. Per the company, the deal will enable Castrol customers to consolidate their lubricants and other consumables into a single source implying high-quality support and services across multiple categories.

Univar’s shares have lost 4.5% in the past three months against the industry’s 3.1% rise.


 
Univar, during first-quarter earnings call, said that it expects strong core business performance in the second quarter of 2018 and also sees high single-digit growth in adjusted EBITDA.

Moreover, the company expects adjusted EBITDA growth of low-double digits for full-year 2018 and adjusted earnings in the range of $1.65-$1.85 per share, up from the previous guidance of $1.60-$1.80.

Univar Inc. Price and Consensus

Univar Inc. Price and Consensus | Univar Inc. Quote

Zacks Rank & Other Stocks to Consider

Univar currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks worth considering in the basic materials space are The Chemours Company (CC - Free Report) , FMC Corporation (FMC - Free Report) and Westlake Chemical Corporation (WLK - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected long-term earnings growth rate of 15.5%. Its shares have gained 33.6% in a year.

FMC Corp has an expected long-term earnings growth rate of 14.3%. Its shares have moved up 19.4% in a year.

Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have rallied 66.9% in a year.

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