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 delve deeper into the factors that make this chemical company an intriguing choice for investors right now.
What Makes CE an Attractive Pick?
Solid Rank & VGM Score: Celanese currently sports a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, combined with a Zacks Rank #1 (Strong Buy) or 2, 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 over the past six months. The company’s shares have gained around 11.6% over this period, compared with roughly 7.7% 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%.
Strong 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. The company also has an expected long-term earnings per share growth rate of 10%.
Upbeat Outlook: Celanese, in July, raised its adjusted earnings per share guidance for 2018 to roughly $10.50-$10.75 factoring in strength across its Engineered Materials and Acetyl Chain units. The company expects the momentum in Acetyl Chain to continue into the third quarter.
The company’s strategic measures including cost savings through productivity actions and efficiency enhancement are expected to continue to drive its earnings. Its bottom line is expected to be driven by productivity actions, price hike initiatives and operational improvement. Celanese expects to achieve productivity savings of $40-$50 million by 2020.
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.
Other Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Trinseo S.A. (TSE - Free Report) and Quaker Chemical Corporation (KWR - Free Report) , each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle has an expected long-term earnings growth rate of 14.2%. The company’s shares are up roughly 9% over the past six months.
Trinseo has an expected long-term earnings growth rate of 12%. The company’s shares have gained around 10% over the past six months.
Quaker Chemical has an expected long-term earnings growth rate of 11%. The company’s shares have rallied around 34% over the past six months.
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