EASTMAN CHEMICAL CO (EMN) Stock Fundamental Analysis
NYSE:EMN - New York Stock Exchange, Inc. - US2774321002 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to EMN. EMN was compared to 85 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 may be a bit undervalued, certainly considering the very reasonable score on growth EMN also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year EMN was profitable.
In the past year EMN had a positive cash flow from operations.
EMN had positive earnings in each of the past 5 years.
In the past 5 years EMN always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.95%, EMN belongs to the top of the industry, outperforming 83.53% of the companies in the same industry.
Looking at the Return On Equity, with a value of 15.66%, EMN belongs to the top of the industry, outperforming 83.53% of the companies in the same industry.
EMN has a better Return On Invested Capital (8.93%) than 80.00% of its industry peers.
EMN had an Average Return On Invested Capital over the past 3 years of 8.36%. This is in line with the industry average of 7.05%.
The last Return On Invested Capital (8.93%) for EMN is above the 3 year average (8.36%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.95% | ||
| ROE | 15.66% | ||
| ROIC | 8.93% |
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
With an excellent Profit Margin value of 9.65%, EMN belongs to the best of the industry, outperforming 87.06% of the companies in the same industry.
In the last couple of years the Profit Margin of EMN has grown nicely.
With a decent Operating Margin value of 14.28%, EMN is doing good in the industry, outperforming 76.47% of the companies in the same industry.
In the last couple of years the Operating Margin of EMN has remained more or less at the same level.
The Gross Margin of EMN (24.41%) is comparable to the rest of the industry.
EMN's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.28% | ||
| PM (TTM) | 9.65% | ||
| GM | 24.41% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so EMN is still creating some value.
The number of shares outstanding for EMN has been reduced compared to 1 year ago.
The number of shares outstanding for EMN has been reduced compared to 5 years ago.
The debt/assets ratio for EMN has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.52 indicates that EMN is not a great score, but indicates only limited risk for bankruptcy at the moment.
EMN has a better Altman-Z score (2.52) than 78.82% of its industry peers.
The Debt to FCF ratio of EMN is 7.29, which is on the high side as it means it would take EMN, 7.29 years of fcf income to pay off all of its debts.
EMN has a better Debt to FCF ratio (7.29) than 65.88% of its industry peers.
A Debt/Equity ratio of 0.79 indicates that EMN is somewhat dependend on debt financing.
EMN has a Debt to Equity ratio (0.79) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 7.29 | ||
| Altman-Z | 2.52 |
ROIC/WACC1.09
WACC8.17%
2.3 Liquidity
EMN has a Current Ratio of 1.51. This is a normal value and indicates that EMN is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.51, EMN is doing worse than 62.35% of the companies in the same industry.
A Quick Ratio of 0.78 indicates that EMN may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.78, EMN is doing worse than 71.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.51 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 23.28% over the past year.
The Earnings Per Share has been growing slightly by 2.08% on average over the past years.
Looking at the last year, EMN shows a small growth in Revenue. The Revenue has grown by 1.87% in the last year.
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)23.28%
EPS 3Y-3.79%
EPS 5Y2.08%
EPS Q2Q%42.75%
Revenue 1Y (TTM)1.87%
Revenue growth 3Y-3.61%
Revenue growth 5Y0.23%
Sales Q2Q%1.72%
3.2 Future
Based on estimates for the next years, EMN will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.20% on average per year.
Based on estimates for the next years, EMN will show a small growth in Revenue. The Revenue will grow by 2.79% on average per year.
EPS Next Y6.31%
EPS Next 2Y8.22%
EPS Next 3Y9.11%
EPS Next 5Y11.2%
Revenue Next Year1.89%
Revenue Next 2Y2.87%
Revenue Next 3Y3.03%
Revenue Next 5Y2.79%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.99, the valuation of EMN can be described as very reasonable.
Based on the Price/Earnings ratio, EMN is valued a bit cheaper than the industry average as 80.00% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 28.64, EMN is valued rather cheaply.
EMN is valuated reasonably with a Price/Forward Earnings ratio of 9.40.
Based on the Price/Forward Earnings ratio, EMN is valued cheaper than 84.71% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of EMN to the average of the S&P500 Index (21.44), we can say EMN is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.99 | ||
| Fwd PE | 9.4 |
4.2 Price Multiples
EMN's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. EMN is cheaper than 64.71% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, EMN is valued a bit cheaper than the industry average as 71.76% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.23 | ||
| EV/EBITDA | 7.21 |
4.3 Compensation for Growth
EMN's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
EMN has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1.58
PEG (5Y)4.82
EPS Next 2Y8.22%
EPS Next 3Y9.11%
5. Dividend
5.1 Amount
EMN has a Yearly Dividend Yield of 4.33%, which is a nice return.
Compared to an average industry Dividend Yield of 3.98, EMN pays a better dividend. On top of this EMN pays more dividend than 83.53% 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 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.33% |
5.2 History
The dividend of EMN has a limited annual growth rate of 5.58%.
EMN has paid a dividend for at least 10 years, which is a reliable track record.
EMN has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)5.58%
Div Incr Years14
Div Non Decr Years29
5.3 Sustainability
41.88% of the earnings are spent on dividend by EMN. This is a bit on the high side, but may be sustainable.
EMN's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP41.88%
EPS Next 2Y8.22%
EPS Next 3Y9.11%
78.84
-0.45 (-0.57%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners92.8%
Inst Owner Change0.57%
Ins Owners0.72%
Ins Owner Change6.18%
Market Cap9.10B
Analysts74.4
Price Target116.29 (47.5%)
Short Float %2.57%
Short Ratio2.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.33% |
Yearly Dividend3.26
Dividend Growth(5Y)5.58%
DP41.88%
Div Incr Years14
Div Non Decr Years29
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.33%
Min EPS beat(2)4.42%
Max EPS beat(2)18.25%
EPS beat(4)4
Avg EPS beat(4)9.89%
Min EPS beat(4)4.42%
Max EPS beat(4)18.25%
EPS beat(8)8
Avg EPS beat(8)8.96%
EPS beat(12)10
Avg EPS beat(12)3.62%
EPS beat(16)12
Avg EPS beat(16)2.91%
Revenue beat(2)1
Avg Revenue beat(2)0.2%
Min Revenue beat(2)-2.22%
Max Revenue beat(2)2.62%
Revenue beat(4)1
Avg Revenue beat(4)-0.15%
Min Revenue beat(4)-2.22%
Max Revenue beat(4)2.62%
Revenue beat(8)1
Avg Revenue beat(8)-2.31%
Revenue beat(12)3
Avg Revenue beat(12)-0.9%
Revenue beat(16)7
Avg Revenue beat(16)0.99%
PT rev (1m)-0.6%
PT rev (3m)-1.34%
EPS NQ rev (1m)-0.66%
EPS NQ rev (3m)-2.1%
EPS NY rev (1m)-2.08%
EPS NY rev (3m)-4.35%
Revenue NQ rev (1m)-0.84%
Revenue NQ rev (3m)-3.01%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)-2.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.99 | ||
| Fwd PE | 9.4 | ||
| P/S | 0.97 | ||
| P/FCF | 13.23 | ||
| P/OCF | 7.07 | ||
| P/B | 1.58 | ||
| P/tB | 8.16 | ||
| EV/EBITDA | 7.21 |
EPS(TTM)7.89
EY10.01%
EPS(NY)8.39
Fwd EY10.64%
FCF(TTM)5.96
FCFY7.56%
OCF(TTM)11.15
OCFY14.14%
SpS81.26
BVpS50.05
TBVpS9.66
PEG (NY)1.58
PEG (5Y)4.82
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.95% | ||
| ROE | 15.66% | ||
| ROCE | 10.72% | ||
| ROIC | 8.93% | ||
| ROICexc | 9.57% | ||
| ROICexgc | 15.94% | ||
| OM | 14.28% | ||
| PM (TTM) | 9.65% | ||
| GM | 24.41% | ||
| FCFM | 7.33% |
ROA(3y)5.82%
ROA(5y)5.19%
ROE(3y)15.81%
ROE(5y)14.08%
ROIC(3y)8.36%
ROIC(5y)8.64%
ROICexc(3y)8.83%
ROICexc(5y)9.06%
ROICexgc(3y)15.26%
ROICexgc(5y)15.76%
ROCE(3y)10.04%
ROCE(5y)10.38%
ROICexcg growth 3Y-10.23%
ROICexcg growth 5Y3.54%
ROICexc growth 3Y-9.52%
ROICexc growth 5Y5.53%
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%
F-Score6
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.79 | ||
| Debt/FCF | 7.29 | ||
| Debt/EBITDA | 2.47 | ||
| Cap/Depr | 117.68% | ||
| Cap/Sales | 6.38% | ||
| Interest Coverage | 6.6 | ||
| Cash Conversion | 69.61% | ||
| Profit Quality | 76.02% | ||
| Current Ratio | 1.51 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z | 2.52 |
F-Score6
WACC8.17%
ROIC/WACC1.09
Cap/Depr(3y)138.26%
Cap/Depr(5y)116.93%
Cap/Sales(3y)7.09%
Cap/Sales(5y)6.22%
Profit Quality(3y)60.45%
Profit Quality(5y)105.96%
High Growth Momentum
Growth
EPS 1Y (TTM)23.28%
EPS 3Y-3.79%
EPS 5Y2.08%
EPS Q2Q%42.75%
EPS Next Y6.31%
EPS Next 2Y8.22%
EPS Next 3Y9.11%
EPS Next 5Y11.2%
Revenue 1Y (TTM)1.87%
Revenue growth 3Y-3.61%
Revenue growth 5Y0.23%
Sales Q2Q%1.72%
Revenue Next Year1.89%
Revenue Next 2Y2.87%
Revenue Next 3Y3.03%
Revenue Next 5Y2.79%
EBIT growth 1Y31.76%
EBIT growth 3Y-10.58%
EBIT growth 5Y1.48%
EBIT Next Year54.03%
EBIT Next 3Y19.98%
EBIT Next 5Y18.8%
FCF growth 1Y26.01%
FCF growth 3Y-13.53%
FCF growth 5Y-8.61%
OCF growth 1Y-6.33%
OCF growth 3Y-7.36%
OCF growth 5Y-3.07%