In the world of growth stocks, NYSE:ALB shines as a value proposition.

Last update: Sep 25, 2023

Here's ALBEMARLE CORP (NYSE:ALB) for you, a growth stock our stock screener believes is undervalued. NYSE:ALB is scoring impressively in terms of growth while demonstrating strong financials. On top of that, it remains attractively priced. Let's break it down further.

Assessing Growth Metrics for NYSE:ALB

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NYSE:ALB, the assigned 8 reflects its growth potential:

ALB shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 328.01%, which is quite impressive.
The Earnings Per Share has been growing by 36.69% on average over the past years. This is a very strong growth
ALB shows a strong growth in Revenue. In the last year, the Revenue has grown by 123.06%.
The Revenue has been growing by 18.96% on average over the past years. This is quite good.
Based on estimates for the next years, ALB will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.67% on average per year.
The Revenue is expected to grow by 11.40% on average over the next years. This is quite good.

ChartMill's Evaluation of Valuation

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NYSE:ALB scores a 8 out of 10:

With a Price/Earnings ratio of 4.98, the valuation of ALB can be described as very cheap.
Based on the Price/Earnings ratio, ALB is valued cheaper than 91.86% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.89, ALB is valued rather cheaply.
A Price/Forward Earnings ratio of 7.12 indicates a rather cheap valuation of ALB.
Based on the Price/Forward Earnings ratio, ALB is valued cheaply inside the industry as 91.86% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of ALB to the average of the S&P500 Index (18.97), we can say ALB is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, ALB is valued a bit cheaper than 75.58% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ALB is valued a bit cheaper than the industry average as 60.47% of the companies are valued more expensively.
ALB's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ALB has an outstanding profitability rating, which may justify a higher PE ratio.

How do we evaluate the Health for NYSE:ALB?

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:ALB has earned a 6 out of 10:

ALB has an Altman-Z score of 3.04. This indicates that ALB is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.04, ALB is in the better half of the industry, outperforming 75.58% of the companies in the same industry.
ALB has a debt to FCF ratio of 3.65. This is a good value and a sign of high solvency as ALB would need 3.65 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.65, ALB is in the better half of the industry, outperforming 73.26% of the companies in the same industry.
A Debt/Equity ratio of 0.36 indicates that ALB is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.36, ALB is in the better half of the industry, outperforming 68.60% of the companies in the same industry.
ALB does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Assessing Profitability for NYSE:ALB

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:ALB was assigned a score of 9 for profitability:

With an excellent Return On Assets value of 20.50%, ALB belongs to the best of the industry, outperforming 98.84% of the companies in the same industry.
ALB has a better Return On Equity (39.92%) than 96.51% of its industry peers.
ALB has a better Return On Invested Capital (16.42%) than 93.02% of its industry peers.
The 3 year average ROIC (8.60%) for ALB is below the current ROIC(16.42%), indicating increased profibility in the last year.
ALB's Profit Margin of 40.55% is amongst the best of the industry. ALB outperforms 98.84% of its industry peers.
In the last couple of years the Profit Margin of ALB has grown nicely.
ALB's Operating Margin of 31.10% is amongst the best of the industry. ALB outperforms 93.02% of its industry peers.
In the last couple of years the Operating Margin of ALB has grown nicely.
ALB's Gross Margin of 40.18% is amongst the best of the industry. ALB outperforms 80.23% of its industry peers.
In the last couple of years the Gross Margin of ALB has grown nicely.

More Affordable Growth stocks can be found in our Affordable Growth screener.

For an up to date full fundamental analysis you can check the fundamental report of ALB

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.