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Innospec's (IOSP) New Center to Support Oil & Gas Industry

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Innospec Inc. (IOSP - Free Report) has completed the construction of an innovation center in The Woodlands, TX.

The center will focus on developing applications and novel technologies to support customers in the North American oil and gas industry, which includes all aspects of fracturing, drilling, production, completion, stimulation, and midstream activities. Moreover, the 22,500-sq-ft facility will house all of the R&D and technical services functions.

The center will bring together scientists in one expanded location. It also increases laboratory space by nearly 70%, which will allow it to support Fuel Specialties customers better.

Shares of Innospec have lost 12.7% over a year compared with the industry’s 27% decline.



The chemical maker’s revenues increased on a year-over-year basis in the third quarter, driven by gains from core businesses.

The company saw an uptick in revenues at its Fuel Specialties and Performance Chemicals segments in the third quarter on higher volumes and positive price/mix impact. Moreover, increased customer activity, higher volumes and favorable price/mix led to double-digit sales growth in its Oilfield Services division in the quarter. The company also witnessed higher operating income across these segments.
 
Innospec is gaining from its balanced portfolio and strategic focus on major end markets. The company remains focused on growing sales and improving margins and is also looking to improve the effectiveness of its operations.

Innospec is also engaged in acquisition opportunities leveraging its strong balance sheet and cash flows, which the company believes will strengthen its business. The company, in its third-quarter call, also said that it will remain focused on key actions to further boost cash generation in the final quarter of 2018.

Innospec Inc. Price and Consensus

 

Zacks Rank & Stocks to Consider

Innospec currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are Ingevity Corporation (NGVT - Free Report) , CF Industries Holdings, Inc. (CF - Free Report) and Cameco Corporation (CCJ - Free Report) .

Ingevity has an expected earnings growth rate of 21.5% for 2019 and a Zacks Rank #1 (Strong Buy). The company’s shares have gained 17.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

CF Industries has an expected earnings growth rate of 70.5% for 2019 and a Zacks Rank #2 (Buy). The stock has gained 7% in a year.

Cameco has an expected earnings growth rate of 20% for 2019 and a Zacks Rank of 2. Its shares have gained 26% in a year’s time.

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