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ELEMENT SOLUTIONS INC (ESI) Stock Fundamental Analysis

NYSE:ESI - New York Stock Exchange, Inc. - US28618M1062 - Common Stock

26.31  +0.01 (+0.04%)

Fundamental Rating

6

ESI gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 85 industry peers in the Chemicals industry. ESI has an excellent profitability rating, but there are some minor concerns on its financial health. ESI has a correct valuation and a medium growth rate.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

In the past year ESI was profitable.
In the past year ESI had a positive cash flow from operations.
Each year in the past 5 years ESI has been profitable.
Each year in the past 5 years ESI had a positive operating cash flow.
ESI Yearly Net Income VS EBIT VS OCF VS FCFESI Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M

1.2 Ratios

Looking at the Return On Assets, with a value of 5.23%, ESI is in the better half of the industry, outperforming 77.11% of the companies in the same industry.
ESI has a Return On Equity of 10.93%. This is in the better half of the industry: ESI outperforms 72.29% of its industry peers.
ESI has a better Return On Invested Capital (5.45%) than 61.45% of its industry peers.
ESI had an Average Return On Invested Capital over the past 3 years of 5.01%. This is in line with the industry average of 6.57%.
The 3 year average ROIC (5.01%) for ESI is below the current ROIC(5.45%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 5.23%
ROE 10.93%
ROIC 5.45%
ROA(3y)3.38%
ROA(5y)2.79%
ROE(3y)7.1%
ROE(5y)5.74%
ROIC(3y)5.01%
ROIC(5y)4.87%
ESI Yearly ROA, ROE, ROICESI Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5 -5 -10 -15

1.3 Margins

Looking at the Profit Margin, with a value of 11.08%, ESI belongs to the top of the industry, outperforming 89.16% of the companies in the same industry.
In the last couple of years the Profit Margin of ESI has grown nicely.
With a decent Operating Margin value of 13.49%, ESI is doing good in the industry, outperforming 77.11% of the companies in the same industry.
ESI's Operating Margin has declined in the last couple of years.
ESI has a better Gross Margin (41.56%) than 84.34% of its industry peers.
ESI's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 13.49%
PM (TTM) 11.08%
GM 41.56%
OM growth 3Y-4.69%
OM growth 5Y-3.02%
PM growth 3Y7.42%
PM growth 5YN/A
GM growth 3Y-2.45%
GM growth 5Y-1.62%
ESI Yearly Profit, Operating, Gross MarginsESI Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 40

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6

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ESI is destroying value.
ESI has more shares outstanding than it did 1 year ago.
ESI has less shares outstanding than it did 5 years ago.
The debt/assets ratio for ESI is higher compared to a year ago.
ESI Yearly Shares OutstandingESI Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M 200M 250M
ESI Yearly Total Debt VS Total AssetsESI Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B 8B 10B

2.2 Solvency

An Altman-Z score of 2.06 indicates that ESI is not a great score, but indicates only limited risk for bankruptcy at the moment.
ESI's Altman-Z score of 2.06 is in line compared to the rest of the industry. ESI outperforms 57.83% of its industry peers.
The Debt to FCF ratio of ESI is 7.04, which is on the high side as it means it would take ESI, 7.04 years of fcf income to pay off all of its debts.
ESI has a Debt to FCF ratio of 7.04. This is in the better half of the industry: ESI outperforms 61.45% of its industry peers.
ESI has a Debt/Equity ratio of 0.78. This is a neutral value indicating ESI is somewhat dependend on debt financing.
ESI has a Debt to Equity ratio of 0.78. This is comparable to the rest of the industry: ESI outperforms 48.19% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.78
Debt/FCF 7.04
Altman-Z 2.06
ROIC/WACC0.68
WACC8.01%
ESI Yearly LT Debt VS Equity VS FCFESI Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 1B 2B 3B 4B 5B

2.3 Liquidity

ESI has a Current Ratio of 3.52. This indicates that ESI is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 3.52, ESI belongs to the best of the industry, outperforming 87.95% of the companies in the same industry.
A Quick Ratio of 2.77 indicates that ESI has no problem at all paying its short term obligations.
ESI's Quick ratio of 2.77 is amongst the best of the industry. ESI outperforms 87.95% of its industry peers.
Industry RankSector Rank
Current Ratio 3.52
Quick Ratio 2.77
ESI Yearly Current Assets VS Current LiabilitesESI Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

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5

3. Growth

3.1 Past

ESI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.90%, which is quite good.
The Earnings Per Share has been growing by 19.47% on average over the past years. This is quite good.
The Revenue has been growing slightly by 3.11% in the past year.
Measured over the past years, ESI shows a small growth in Revenue. The Revenue has been growing by 3.54% on average per year.
EPS 1Y (TTM)11.9%
EPS 3Y10.35%
EPS 5Y19.47%
EPS Q2Q%8.33%
Revenue 1Y (TTM)3.11%
Revenue growth 3Y7.97%
Revenue growth 5Y3.54%
Sales Q2Q%7.63%

3.2 Future

Based on estimates for the next years, ESI will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.29% on average per year.
The Revenue is expected to grow by 3.19% on average over the next years.
EPS Next Y12.51%
EPS Next 2Y12.49%
EPS Next 3Y13.47%
EPS Next 5Y10.29%
Revenue Next Year3.71%
Revenue Next 2Y3.48%
Revenue Next 3Y4.49%
Revenue Next 5Y3.19%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
ESI Yearly Revenue VS EstimatesESI Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 1B 2B 3B
ESI Yearly EPS VS EstimatesESI Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0.5 1 1.5

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4

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 18.66, which indicates a rather expensive current valuation of ESI.
The rest of the industry has a similar Price/Earnings ratio as ESI.
ESI is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 16.12 indicates a correct valuation of ESI.
ESI's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of ESI to the average of the S&P500 Index (24.44), we can say ESI is valued slightly cheaper.
Industry RankSector Rank
PE 18.66
Fwd PE 16.12
ESI Price Earnings VS Forward Price EarningsESI Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ESI indicates a slightly more expensive valuation: ESI is more expensive than 67.47% of the companies listed in the same industry.
ESI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ESI is cheaper than 61.45% of the companies in the same industry.
Industry RankSector Rank
P/FCF 23.3
EV/EBITDA 16.28
ESI Per share dataESI EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 -2 4 6 8 10

4.3 Compensation for Growth

The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of ESI may justify a higher PE ratio.
ESI's earnings are expected to grow with 13.47% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.49
PEG (5Y)0.96
EPS Next 2Y12.49%
EPS Next 3Y13.47%

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3

5. Dividend

5.1 Amount

ESI has a Yearly Dividend Yield of 1.24%.
ESI's Dividend Yield is comparable with the industry average which is at 3.26.
With a Dividend Yield of 1.24, ESI pays less dividend than the S&P500 average, which is at 2.28.
Industry RankSector Rank
Dividend Yield 1.24%

5.2 History

ESI has been paying a dividend for over 5 years, so it has already some track record.
ESI has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years3
ESI Yearly Dividends per shareESI Yearly Dividends per shareYearly Dividends per share 2020 2021 2022 2023 2024 0.1 0.2 0.3

5.3 Sustainability

ESI pays out 29.29% of its income as dividend. This is a sustainable payout ratio.
DP29.29%
EPS Next 2Y12.49%
EPS Next 3Y13.47%
ESI Yearly Income VS Free CF VS DividendESI Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M
ESI Dividend Payout.ESI Dividend Payout, showing the Payout Ratio.ESI Dividend Payout.PayoutRetained Earnings

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ELEMENT SOLUTIONS INC

NYSE:ESI (1/22/2025, 1:54:42 PM)

26.31

+0.01 (+0.04%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)10-28 2024-10-28/amc
Earnings (Next)02-18 2025-02-18/amc
Inst Owners94.07%
Inst Owner Change-0.01%
Ins Owners7.79%
Ins Owner Change0%
Market Cap6.37B
Analysts81.33
Price Target32.68 (24.21%)
Short Float %0.62%
Short Ratio1.14
Dividend
Industry RankSector Rank
Dividend Yield 1.24%
Yearly Dividend0.32
Dividend Growth(5Y)N/A
DP29.29%
Div Incr Years0
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.7%
Min EPS beat(2)1.17%
Max EPS beat(2)2.23%
EPS beat(4)3
Avg EPS beat(4)1.64%
Min EPS beat(4)-2.88%
Max EPS beat(4)6.05%
EPS beat(8)6
Avg EPS beat(8)1.98%
EPS beat(12)9
Avg EPS beat(12)2.5%
EPS beat(16)13
Avg EPS beat(16)3.75%
Revenue beat(2)1
Avg Revenue beat(2)0.84%
Min Revenue beat(2)-0.27%
Max Revenue beat(2)1.94%
Revenue beat(4)1
Avg Revenue beat(4)-1.33%
Min Revenue beat(4)-3.88%
Max Revenue beat(4)1.94%
Revenue beat(8)1
Avg Revenue beat(8)-2.52%
Revenue beat(12)3
Avg Revenue beat(12)-1.38%
Revenue beat(16)7
Avg Revenue beat(16)0.67%
PT rev (1m)0.57%
PT rev (3m)3.01%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.25%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.38%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.67%
Revenue NY rev (1m)0.29%
Revenue NY rev (3m)0.61%
Valuation
Industry RankSector Rank
PE 18.66
Fwd PE 16.12
P/S 2.65
P/FCF 23.3
P/OCF 18.96
P/B 2.61
P/tB N/A
EV/EBITDA 16.28
EPS(TTM)1.41
EY5.36%
EPS(NY)1.63
Fwd EY6.2%
FCF(TTM)1.13
FCFY4.29%
OCF(TTM)1.39
OCFY5.27%
SpS9.94
BVpS10.07
TBVpS-2.33
PEG (NY)1.49
PEG (5Y)0.96
Profitability
Industry RankSector Rank
ROA 5.23%
ROE 10.93%
ROCE 6.88%
ROIC 5.45%
ROICexc 5.92%
ROICexgc 19.24%
OM 13.49%
PM (TTM) 11.08%
GM 41.56%
FCFM 11.37%
ROA(3y)3.38%
ROA(5y)2.79%
ROE(3y)7.1%
ROE(5y)5.74%
ROIC(3y)5.01%
ROIC(5y)4.87%
ROICexc(3y)5.35%
ROICexc(5y)5.19%
ROICexgc(3y)22.78%
ROICexgc(5y)23.98%
ROCE(3y)6.33%
ROCE(5y)6.15%
ROICexcg growth 3Y-8.69%
ROICexcg growth 5Y34.92%
ROICexc growth 3Y-0.7%
ROICexc growth 5Y13.67%
OM growth 3Y-4.69%
OM growth 5Y-3.02%
PM growth 3Y7.42%
PM growth 5YN/A
GM growth 3Y-2.45%
GM growth 5Y-1.62%
F-Score8
Asset Turnover0.47
Health
Industry RankSector Rank
Debt/Equity 0.78
Debt/FCF 7.04
Debt/EBITDA 3.94
Cap/Depr 38.63%
Cap/Sales 2.6%
Interest Coverage 250
Cash Conversion 69.09%
Profit Quality 102.59%
Current Ratio 3.52
Quick Ratio 2.77
Altman-Z 2.06
F-Score8
WACC8.01%
ROIC/WACC0.68
Cap/Depr(3y)29.83%
Cap/Depr(5y)25.31%
Cap/Sales(3y)2.02%
Cap/Sales(5y)1.85%
Profit Quality(3y)169.69%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)11.9%
EPS 3Y10.35%
EPS 5Y19.47%
EPS Q2Q%8.33%
EPS Next Y12.51%
EPS Next 2Y12.49%
EPS Next 3Y13.47%
EPS Next 5Y10.29%
Revenue 1Y (TTM)3.11%
Revenue growth 3Y7.97%
Revenue growth 5Y3.54%
Sales Q2Q%7.63%
Revenue Next Year3.71%
Revenue Next 2Y3.48%
Revenue Next 3Y4.49%
Revenue Next 5Y3.19%
EBIT growth 1Y25.68%
EBIT growth 3Y2.91%
EBIT growth 5Y0.41%
EBIT Next Year36.05%
EBIT Next 3Y16.79%
EBIT Next 5Y12.92%
FCF growth 1Y3.6%
FCF growth 3Y6.78%
FCF growth 5YN/A
OCF growth 1Y6.53%
OCF growth 3Y8.72%
OCF growth 5YN/A