ELEMENT SOLUTIONS INC (ESI) Stock Fundamental Analysis
NYSE:ESI - New York Stock Exchange, Inc. - US28618M1062 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to ESI. ESI was compared to 85 industry peers in the Chemicals industry. ESI has an excellent profitability rating, but there are some minor concerns on its financial health. ESI is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year ESI was profitable.
ESI had a positive operating cash flow in the past year.
Each year in the past 5 years ESI has been profitable.
In the past 5 years ESI always reported a positive cash flow from operatings.
1.2 Ratios
ESI has a better Return On Assets (5.01%) than 77.65% of its industry peers.
ESI has a better Return On Equity (10.25%) than 74.12% of its industry peers.
ESI has a better Return On Invested Capital (6.67%) than 67.06% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ESI is in line with the industry average of 7.05%.
The 3 year average ROIC (5.90%) for ESI is below the current ROIC(6.67%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.01% | ||
| ROE | 10.25% | ||
| ROIC | 6.67% |
ROA(3y)3.73%
ROA(5y)3.37%
ROE(3y)7.78%
ROE(5y)6.96%
ROIC(3y)5.9%
ROIC(5y)5.62%
1.3 Margins
With an excellent Profit Margin value of 9.94%, ESI belongs to the best of the industry, outperforming 89.41% of the companies in the same industry.
ESI's Profit Margin has improved in the last couple of years.
ESI's Operating Margin of 14.00% is fine compared to the rest of the industry. ESI outperforms 74.12% of its industry peers.
ESI's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 42.15%, ESI belongs to the top of the industry, outperforming 88.24% of the companies in the same industry.
ESI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14% | ||
| PM (TTM) | 9.94% | ||
| GM | 42.15% |
OM growth 3Y3.85%
OM growth 5Y0.62%
PM growth 3Y5.47%
PM growth 5Y14.63%
GM growth 3Y1.73%
GM growth 5Y-0.37%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ESI is destroying value.
The number of shares outstanding for ESI has been increased compared to 1 year ago.
ESI has less shares outstanding than it did 5 years ago.
ESI has a better debt/assets ratio than last year.
2.2 Solvency
ESI has an Altman-Z score of 1.77. This is a bad value and indicates that ESI is not financially healthy and even has some risk of bankruptcy.
ESI has a Altman-Z score (1.77) which is in line with its industry peers.
ESI has a debt to FCF ratio of 6.18. This is a slightly negative value and a sign of low solvency as ESI would need 6.18 years to pay back of all of its debts.
ESI's Debt to FCF ratio of 6.18 is fine compared to the rest of the industry. ESI outperforms 69.41% of its industry peers.
A Debt/Equity ratio of 0.76 indicates that ESI is somewhat dependend on debt financing.
The Debt to Equity ratio of ESI (0.76) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 6.18 | ||
| Altman-Z | 1.77 |
ROIC/WACC0.82
WACC8.13%
2.3 Liquidity
ESI has a Current Ratio of 3.34. This indicates that ESI is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 3.34, ESI belongs to the top of the industry, outperforming 87.06% of the companies in the same industry.
A Quick Ratio of 2.70 indicates that ESI has no problem at all paying its short term obligations.
ESI has a Quick ratio of 2.70. This is amongst the best in the industry. ESI outperforms 88.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.34 | ||
| Quick Ratio | 2.7 |
3. Growth
3.1 Past
ESI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.63%, which is quite good.
The Earnings Per Share has been growing by 10.10% on average over the past years. This is quite good.
Looking at the last year, ESI shows a small growth in Revenue. The Revenue has grown by 5.30% in the last year.
The Revenue has been growing slightly by 6.00% on average over the past years.
EPS 1Y (TTM)11.63%
EPS 3Y1.43%
EPS 5Y10.1%
EPS Q2Q%9.37%
Revenue 1Y (TTM)5.3%
Revenue growth 3Y0.79%
Revenue growth 5Y6%
Sales Q2Q%8.86%
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 9.31% on average per year.
The Revenue is expected to grow by 3.40% on average over the next years.
EPS Next Y-0.05%
EPS Next 2Y5.75%
EPS Next 3Y9.31%
EPS Next 5YN/A
Revenue Next Year0.04%
Revenue Next 2Y2.83%
Revenue Next 3Y3.4%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
The Price/Earnings ratio is 13.15, which indicates a correct valuation of ESI.
67.06% of the companies in the same industry are more expensive than ESI, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.29, ESI is valued rather cheaply.
ESI is valuated correctly with a Price/Forward Earnings ratio of 13.15.
ESI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ESI is cheaper than 62.35% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.32, ESI is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.15 | ||
| Fwd PE | 13.15 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ESI is on the same level as its industry peers.
ESI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. ESI is cheaper than 70.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.55 | ||
| EV/EBITDA | 12.07 |
4.3 Compensation for Growth
ESI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.3
EPS Next 2Y5.75%
EPS Next 3Y9.31%
5. Dividend
5.1 Amount
ESI has a Yearly Dividend Yield of 1.69%.
The stock price of ESI dropped by -27.05% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
ESI's Dividend Yield is comparable with the industry average which is at 3.98.
ESI's Dividend Yield is slightly below the S&P500 average, which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.69% |
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
5.3 Sustainability
ESI pays out 32.02% of its income as dividend. This is a sustainable payout ratio.
DP32.02%
EPS Next 2Y5.75%
EPS Next 3Y9.31%
18.93
+0.33 (+1.77%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners92.63%
Inst Owner Change-0.2%
Ins Owners7.83%
Ins Owner Change2.26%
Market Cap4.59B
Analysts77.5
Price Target31.74 (67.67%)
Short Float %0.71%
Short Ratio0.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.69% |
Yearly Dividend0.32
Dividend Growth(5Y)N/A
DP32.02%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.49%
Min EPS beat(2)-0.19%
Max EPS beat(2)1.17%
EPS beat(4)3
Avg EPS beat(4)2.31%
Min EPS beat(4)-0.19%
Max EPS beat(4)6.05%
EPS beat(8)5
Avg EPS beat(8)1.79%
EPS beat(12)8
Avg EPS beat(12)2.22%
EPS beat(16)12
Avg EPS beat(16)3.22%
Revenue beat(2)2
Avg Revenue beat(2)2.84%
Min Revenue beat(2)1.94%
Max Revenue beat(2)3.73%
Revenue beat(4)2
Avg Revenue beat(4)0.58%
Min Revenue beat(4)-3.1%
Max Revenue beat(4)3.73%
Revenue beat(8)2
Avg Revenue beat(8)-1.58%
Revenue beat(12)3
Avg Revenue beat(12)-1.59%
Revenue beat(16)7
Avg Revenue beat(16)0.45%
PT rev (1m)0%
PT rev (3m)-2.87%
EPS NQ rev (1m)0.1%
EPS NQ rev (3m)-11.46%
EPS NY rev (1m)-3.54%
EPS NY rev (3m)-11.84%
Revenue NQ rev (1m)0.52%
Revenue NQ rev (3m)-4.46%
Revenue NY rev (1m)0.2%
Revenue NY rev (3m)-3.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.15 | ||
| Fwd PE | 13.15 | ||
| P/S | 1.87 | ||
| P/FCF | 15.55 | ||
| P/OCF | 12.62 | ||
| P/B | 1.93 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.07 |
EPS(TTM)1.44
EY7.61%
EPS(NY)1.44
Fwd EY7.6%
FCF(TTM)1.22
FCFY6.43%
OCF(TTM)1.5
OCFY7.92%
SpS10.13
BVpS9.83
TBVpS-1.98
PEG (NY)N/A
PEG (5Y)1.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.01% | ||
| ROE | 10.25% | ||
| ROCE | 7.65% | ||
| ROIC | 6.67% | ||
| ROICexc | 7.25% | ||
| ROICexgc | 23.59% | ||
| OM | 14% | ||
| PM (TTM) | 9.94% | ||
| GM | 42.15% | ||
| FCFM | 12.02% |
ROA(3y)3.73%
ROA(5y)3.37%
ROE(3y)7.78%
ROE(5y)6.96%
ROIC(3y)5.9%
ROIC(5y)5.62%
ROICexc(3y)6.33%
ROICexc(5y)6.03%
ROICexgc(3y)23.36%
ROICexgc(5y)25.05%
ROCE(3y)6.76%
ROCE(5y)6.44%
ROICexcg growth 3Y-6.36%
ROICexcg growth 5Y-4.9%
ROICexc growth 3Y6.8%
ROICexc growth 5Y5.1%
OM growth 3Y3.85%
OM growth 5Y0.62%
PM growth 3Y5.47%
PM growth 5Y14.63%
GM growth 3Y1.73%
GM growth 5Y-0.37%
F-Score8
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 6.18 | ||
| Debt/EBITDA | 3.62 | ||
| Cap/Depr | 43.4% | ||
| Cap/Sales | 2.78% | ||
| Interest Coverage | 5.31 | ||
| Cash Conversion | 72.5% | ||
| Profit Quality | 120.89% | ||
| Current Ratio | 3.34 | ||
| Quick Ratio | 2.7 | ||
| Altman-Z | 1.77 |
F-Score8
WACC8.13%
ROIC/WACC0.82
Cap/Depr(3y)34.88%
Cap/Depr(5y)30.15%
Cap/Sales(3y)2.31%
Cap/Sales(5y)2.08%
Profit Quality(3y)164.7%
Profit Quality(5y)187.42%
High Growth Momentum
Growth
EPS 1Y (TTM)11.63%
EPS 3Y1.43%
EPS 5Y10.1%
EPS Q2Q%9.37%
EPS Next Y-0.05%
EPS Next 2Y5.75%
EPS Next 3Y9.31%
EPS Next 5YN/A
Revenue 1Y (TTM)5.3%
Revenue growth 3Y0.79%
Revenue growth 5Y6%
Sales Q2Q%8.86%
Revenue Next Year0.04%
Revenue Next 2Y2.83%
Revenue Next 3Y3.4%
Revenue Next 5YN/A
EBIT growth 1Y35.61%
EBIT growth 3Y4.67%
EBIT growth 5Y6.66%
EBIT Next Year11.79%
EBIT Next 3Y10.44%
EBIT Next 5YN/A
FCF growth 1Y4.27%
FCF growth 3Y2.24%
FCF growth 5YN/A
OCF growth 1Y8.28%
OCF growth 3Y4.08%
OCF growth 5Y108.63%