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Innospec (IOSP) Up 40% in 6 Months: What's Driving the Rally?

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Shares of Innospec Inc. have jumped roughly 40% over the past six months. The company has also significantly outperformed its industry’s decline of roughly 18% over the same time frame.

Innospec, a Zacks Rank #2 (Buy) stock, has a market cap of roughly $2.1 billion and average volume of shares traded in the last three months was around 92.5K.


 

Let’s take a look into the factors that are driving this chemical maker.

Driving Factors

Forecast-topping earnings performance and upbeat prospects have contributed to the rally in the company’s shares. Innospec’s adjusted earnings of $1.25 per share for the first quarter rose from $1.02 per share a year ago and also outstripped the Zacks Consensus Estimate of $1.15.

Notably, Innospec has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this timeframe, the company has delivered a positive average earnings surprise of roughly 9.1%.

Buoyed by the strong first-quarter performance, Innospec also declared its semi-annual dividend of 50 cents per share for the first half of 2019, representing an increase of 14%.

Innospec, in its first-quarter call, said that it will remain focused on organic growth to develop innovative technologies along with potential acquisition opportunities. The company continues to invest in organic growth projects. Innospec also sees attractive business prospects for the balance of 2019 and beyond.

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. It also has significant organic growth projects in its pipeline.

Innospec is also engaged in acquisition opportunities leveraging its strong balance sheet and cash flows, which the company believes will strengthen its business.

Earnings estimates for Innospec for 2019 have also moved up over the past three months. Over this period, the Zacks Consensus Estimate for the year has increased by around 3%. The Zacks Consensus Estimate for earnings for 2019 is currently pegged at $5.15 per share, reflecting an expected year-over-year growth of 6.6%.

Innospec Inc. Price and Consensus

 

Innospec Inc. Price and Consensus

Innospec Inc. price-consensus-chart | Innospec Inc. Quote

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Materion Corporation (MTRN - Free Report) , Flexible Solutions International Inc (FSI - Free Report) and AngloGold Ashanti Limited (AU - Free Report) .

Materion has an expected earnings growth rate of 27.3% for the current year and carries a Zacks Rank #1 (Strong Buy). The company’s shares have gained around 22% over the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flexible Solutions has an expected earnings growth rate of 342.9% for the current fiscal year and carries a Zacks Rank #1. Its shares have surged around 144% in the past year.

AngloGold has an expected earnings growth rate of 90.6% for the current year and carries a Zacks Rank #1. Its shares have soared roughly 117% in the past year.

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