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. While ESI has a great profitability rating, there are some minor concerns on its financial health. ESI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
ESI had positive earnings in the past year.
In the past year ESI had a positive cash flow from operations.
In the past 5 years ESI has always been profitable.
ESI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 5.01%, ESI is doing good in the industry, outperforming 73.49% of the companies in the same industry.
ESI has a better Return On Equity (10.25%) than 67.47% of its industry peers.
ESI's Return On Invested Capital of 6.67% is fine compared to the rest of the industry. ESI outperforms 67.47% 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 6.65%.
The last Return On Invested Capital (6.67%) for ESI is above the 3 year average (5.90%), which is a sign of increasing profitability.
| 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
ESI has a better Profit Margin (9.94%) than 84.34% of its industry peers.
ESI's Profit Margin has improved in the last couple of years.
The Operating Margin of ESI (14.00%) is better than 77.11% of its industry peers.
ESI's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 42.15%, ESI belongs to the best of the industry, outperforming 84.34% 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
ESI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
The debt/assets ratio for ESI has been reduced compared to a year ago.
2.2 Solvency
ESI has an Altman-Z score of 2.24. This is not the best score and indicates that ESI is in the grey zone with still only limited risk for bankruptcy at the moment.
ESI's Altman-Z score of 2.24 is fine compared to the rest of the industry. ESI outperforms 61.45% of 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 has a Debt to FCF ratio of 6.18. This is in the better half of the industry: ESI outperforms 67.47% of its industry peers.
A Debt/Equity ratio of 0.76 indicates that ESI is somewhat dependend on debt financing.
ESI's Debt to Equity ratio of 0.76 is in line compared to the rest of the industry. ESI outperforms 48.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 6.18 | ||
| Altman-Z | 2.24 |
ROIC/WACC0.78
WACC8.53%
2.3 Liquidity
A Current Ratio of 3.34 indicates that ESI has no problem at all paying its short term obligations.
ESI has a Current ratio of 3.34. This is amongst the best in the industry. ESI outperforms 87.95% of its industry peers.
A Quick Ratio of 2.70 indicates that ESI has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 2.70, ESI belongs to the best of the industry, outperforming 87.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.34 | ||
| Quick Ratio | 2.7 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.63% over the past year.
Measured over the past years, ESI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.10% on average per year.
Looking at the last year, ESI shows a small growth in Revenue. The Revenue has grown by 5.30% in the last year.
Measured over the past years, ESI shows a small growth in Revenue. The Revenue has been growing by 6.00% on average per year.
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
The Earnings Per Share is expected to grow by 10.30% on average over the next years. This is quite good.
Based on estimates for the next years, ESI will show a small growth in Revenue. The Revenue will grow by 3.06% on average per year.
EPS Next Y3.61%
EPS Next 2Y9.48%
EPS Next 3Y10.3%
EPS Next 5YN/A
Revenue Next Year-0.77%
Revenue Next 2Y2.32%
Revenue Next 3Y3.06%
Revenue Next 5YN/A
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 stable.
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
A Price/Earnings ratio of 18.40 indicates a rather expensive valuation of ESI.
ESI's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of ESI to the average of the S&P500 Index (29.63), we can say ESI is valued slightly cheaper.
A Price/Forward Earnings ratio of 17.76 indicates a rather expensive valuation of ESI.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ESI is on the same level as its industry peers.
ESI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.4 | ||
| Fwd PE | 17.76 |
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.
Based on the Price/Free Cash Flow ratio, ESI is valued a bit cheaper than the industry average as 63.86% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.74 | ||
| EV/EBITDA | 16 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
ESI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.09
PEG (5Y)1.82
EPS Next 2Y9.48%
EPS Next 3Y10.3%
5. Dividend
5.1 Amount
ESI has a Yearly Dividend Yield of 1.16%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.27, ESI has a dividend in line with its industry peers.
With a Dividend Yield of 1.16, ESI pays less dividend than the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
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 2Y9.48%
EPS Next 3Y10.3%
26.5
-0.59 (-2.18%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners94.07%
Inst Owner Change-0.4%
Ins Owners7.79%
Ins Owner Change2.26%
Market Cap6.42B
Analysts77.5
Price Target31.57 (19.13%)
Short Float %0.73%
Short Ratio1.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
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)-3.39%
PT rev (3m)-0.77%
EPS NQ rev (1m)-0.49%
EPS NQ rev (3m)-0.49%
EPS NY rev (1m)0.02%
EPS NY rev (3m)0.02%
Revenue NQ rev (1m)-0.65%
Revenue NQ rev (3m)-0.65%
Revenue NY rev (1m)-0.12%
Revenue NY rev (3m)0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.4 | ||
| Fwd PE | 17.76 | ||
| P/S | 2.61 | ||
| P/FCF | 21.74 | ||
| P/OCF | 17.65 | ||
| P/B | 2.69 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16 |
EPS(TTM)1.44
EY5.43%
EPS(NY)1.49
Fwd EY5.63%
FCF(TTM)1.22
FCFY4.6%
OCF(TTM)1.5
OCFY5.67%
SpS10.15
BVpS9.84
TBVpS-1.99
PEG (NY)5.09
PEG (5Y)1.82
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 | 2.24 |
F-Score8
WACC8.53%
ROIC/WACC0.78
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 Y3.61%
EPS Next 2Y9.48%
EPS Next 3Y10.3%
EPS Next 5YN/A
Revenue 1Y (TTM)5.3%
Revenue growth 3Y0.79%
Revenue growth 5Y6%
Sales Q2Q%8.86%
Revenue Next Year-0.77%
Revenue Next 2Y2.32%
Revenue Next 3Y3.06%
Revenue Next 5YN/A
EBIT growth 1Y35.61%
EBIT growth 3Y4.67%
EBIT growth 5Y6.66%
EBIT Next Year13.98%
EBIT Next 3Y10.22%
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%