Back to top

Image: Bigstock

5 Reasons That Make Celanese (CE) Stock a Solid Choice Now

Read MoreHide Full Article

Celanese Corporation’s (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 take a look into the factors that make this chemical maker an intriguing choice for investors right now.

What Makes CE an Attractive Pick?

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.

An Outperformer: Celanese has outperformed the industry it belongs to over a year. The company’s shares have gained around 19.7% over this period, compared with roughly 7.2% growth 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 11.5%.

Solid Growth Prospects: The Zacks Consensus Estimate for earnings for third-quarter 2018 for Celanese is currently pegged at $2.75, reflecting an expected year-over-year growth of 42.5%. Moreover, earnings are expected to register a 40.8% growth in 2018.

Strong Q2 and Buoyant Outlook: Celanese saw its profits surge roughly 47% year over year in second-quarter 2018. Adjusted earnings of $2.90 per share outstripped the Zacks Consensus Estimate of $2.40.
 
Revenues also jumped roughly 22% year over year to $1,844 million, outpacing the Zacks Consensus Estimate of $1,789 million. The company benefited from gains across its Engineered Materials (EM) and Acetyl Chain units in the quarter. Strong pricing across its businesses also supported the results.

Celanese raised its adjusted earnings per share guidance for 2018 to roughly $10.50-$10.75 factoring in strength across its EM and Acetyl Chain units. The company expects the momentum in Acetyl Chain to continue into the third quarter.

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 acquisition of Omni Plastics L.L.C. and its subsidiaries has strengthened 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 also continues to generate strong cash flows and remains focused on returning value to its shareholders. The company generated record free cash flow of $500 million and returned $173 million to shareholders through dividends and share repurchases in the second quarter. Celanese expects to deliver free cash flow of more than $1 billion in 2018.

Celanese Corporation Price and Consensus

 

Celanese Corporation Price and Consensus | Celanese Corporation Quote

Other Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Ingevity Corporation (NGVT - Free Report) , Huntsman Corporation (HUN - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingevity has an expected long-term earnings growth rate of 12% and a Zacks Rank #1. The company’s shares have rallied around 76% in a year.

Huntsman has an expected long-term earnings growth rate of 8.5% and a Zacks Rank #1. The company’s shares have rallied around 25% in a year.

Air Products has an expected long-term earnings growth rate of 16.2% and carries a Zacks Rank #2. Its shares have gained roughly 14% over a year.

The Hottest Tech Mega-Trend of All                 

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>       
 

Published in