EASTMAN CHEMICAL CO (EMN) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:EMN - US2774321002 - Common Stock
68.71 USD
-0.24 (-0.35%)
68.71 USD
0 (0%)
EMN gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 82 industry peers in the Chemicals industry. While EMN belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. EMN has a bad growth rate and is valued cheaply. EMN also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
- EMN had positive earnings in the past year.
- EMN had a positive operating cash flow in the past year.
- In the past 5 years EMN has always been profitable.
- Each year in the past 5 years EMN had a positive operating cash flow.
1.2 Ratios
- EMN has a better Return On Assets (4.67%) than 78.05% of its industry peers.
- EMN's Return On Equity of 12.11% is amongst the best of the industry. EMN outperforms 82.93% of its industry peers.
- With a decent Return On Invested Capital value of 7.41%, EMN is doing good in the industry, outperforming 73.17% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for EMN is above the industry average of 6.11%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.67% | ||
| ROE | 12.11% | ||
| ROIC | 7.41% |
ROA(3y)5.82%
ROA(5y)5.19%
ROE(3y)15.81%
ROE(5y)14.08%
ROIC(3y)8.36%
ROIC(5y)8.64%
1.3 Margins
- The Profit Margin of EMN (7.75%) is better than 75.61% of its industry peers.
- In the last couple of years the Profit Margin of EMN has grown nicely.
- EMN has a Operating Margin of 12.92%. This is in the better half of the industry: EMN outperforms 68.29% of its industry peers.
- In the last couple of years the Operating Margin of EMN has remained more or less at the same level.
- With a Gross Margin value of 22.85%, EMN is not doing good in the industry: 60.98% of the companies in the same industry are doing better.
- In the last couple of years the Gross Margin of EMN has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.92% | ||
| PM (TTM) | 7.75% | ||
| GM | 22.85% |
OM growth 3Y-7.23%
OM growth 5Y1.24%
PM growth 3Y5.65%
PM growth 5Y3.34%
GM growth 3Y0.75%
GM growth 5Y0.26%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), EMN is destroying value.
- Compared to 1 year ago, EMN has less shares outstanding
- EMN has less shares outstanding than it did 5 years ago.
- EMN has a better debt/assets ratio than last year.
2.2 Solvency
- EMN has an Altman-Z score of 2.45. This is not the best score and indicates that EMN is in the grey zone with still only limited risk for bankruptcy at the moment.
- With a decent Altman-Z score value of 2.45, EMN is doing good in the industry, outperforming 65.85% of the companies in the same industry.
- EMN has a debt to FCF ratio of 12.85. This is a negative value and a sign of low solvency as EMN would need 12.85 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 12.85, EMN is in line with its industry, outperforming 57.32% of the companies in the same industry.
- A Debt/Equity ratio of 0.88 indicates that EMN is somewhat dependend on debt financing.
- EMN has a worse Debt to Equity ratio (0.88) than 60.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.88 | ||
| Debt/FCF | 12.85 | ||
| Altman-Z | 2.45 |
ROIC/WACC0.67
WACC11.05%
2.3 Liquidity
- A Current Ratio of 1.76 indicates that EMN should not have too much problems paying its short term obligations.
- EMN has a Current ratio (1.76) which is comparable to the rest of the industry.
- EMN has a Quick Ratio of 1.76. This is a bad value and indicates that EMN is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.86, EMN is doing worse than 75.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.76 | ||
| Quick Ratio | 0.86 |
3. Growth
3.1 Past
- The earnings per share for EMN have decreased strongly by -11.05% in the last year.
- EMN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.08% yearly.
- EMN shows a decrease in Revenue. In the last year, the revenue decreased by -3.42%.
- Measured over the past years, EMN shows a small growth in Revenue. The Revenue has been growing by 0.23% on average per year.
EPS 1Y (TTM)-11.05%
EPS 3Y-3.79%
EPS 5Y2.08%
EPS Q2Q%-49.56%
Revenue 1Y (TTM)-3.42%
Revenue growth 3Y-3.61%
Revenue growth 5Y0.23%
Sales Q2Q%-10.63%
3.2 Future
- The Earnings Per Share is expected to grow by 2.78% on average over the next years.
- The Revenue is expected to decrease by -0.52% on average over the next years.
EPS Next Y-30.45%
EPS Next 2Y-11.06%
EPS Next 3Y-3.28%
EPS Next 5Y2.78%
Revenue Next Year-6.39%
Revenue Next 2Y-3.08%
Revenue Next 3Y-1.14%
Revenue Next 5Y-0.52%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 10.54, the valuation of EMN can be described as reasonable.
- Compared to the rest of the industry, the Price/Earnings ratio of EMN indicates a rather cheap valuation: EMN is cheaper than 86.59% of the companies listed in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.21. EMN is valued rather cheaply when compared to this.
- Based on the Price/Forward Earnings ratio of 11.01, the valuation of EMN can be described as reasonable.
- EMN's Price/Forward Earnings ratio is rather cheap when compared to the industry. EMN is cheaper than 85.37% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, EMN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.54 | ||
| Fwd PE | 11.01 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, EMN is valued cheaper than 81.71% of the companies in the same industry.
- EMN's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. EMN is cheaper than 71.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.84 | ||
| EV/EBITDA | 7.25 |
4.3 Compensation for Growth
- The decent profitability rating of EMN may justify a higher PE ratio.
- EMN's earnings are expected to decrease with -3.28% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)5.08
EPS Next 2Y-11.06%
EPS Next 3Y-3.28%
5. Dividend
5.1 Amount
- EMN has a Yearly Dividend Yield of 4.78%, which is a nice return.
- Compared to an average industry Dividend Yield of 2.28, EMN pays a better dividend. On top of this EMN pays more dividend than 89.02% of the companies listed in the same industry.
- EMN's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.78% |
5.2 History
- The dividend of EMN has a limited annual growth rate of 5.58%.
- EMN has been paying a dividend for at least 10 years, so it has a reliable track record.
- EMN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)5.58%
Div Incr Years15
Div Non Decr Years30
5.3 Sustainability
- EMN pays out 54.51% of its income as dividend. This is a bit on the high side, but may be sustainable.
- EMN's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP54.51%
EPS Next 2Y-11.06%
EPS Next 3Y-3.28%
EASTMAN CHEMICAL CO / EMN FAQ
Can you provide the ChartMill fundamental rating for EASTMAN CHEMICAL CO?
ChartMill assigns a fundamental rating of 5 / 10 to EMN.
Can you provide the valuation status for EASTMAN CHEMICAL CO?
ChartMill assigns a valuation rating of 7 / 10 to EASTMAN CHEMICAL CO (EMN). This can be considered as Undervalued.
Can you provide the profitability details for EASTMAN CHEMICAL CO?
EASTMAN CHEMICAL CO (EMN) has a profitability rating of 7 / 10.
What is the expected EPS growth for EASTMAN CHEMICAL CO (EMN) stock?
The Earnings per Share (EPS) of EASTMAN CHEMICAL CO (EMN) is expected to decline by -30.45% in the next year.
How sustainable is the dividend of EASTMAN CHEMICAL CO (EMN) stock?
The dividend rating of EASTMAN CHEMICAL CO (EMN) is 8 / 10 and the dividend payout ratio is 54.51%.