ELEMENT SOLUTIONS INC (ESI)
US28618M1062 - Common Stock
We assign a fundamental rating of 5 out of 10 to ESI. ESI was compared to 83 industry peers in the Chemicals industry. While ESI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. ESI has a decent growth rate and is not valued too expensively.
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.
In the past 5 years ESI always reported a positive cash flow from operatings.
1.2 Ratios
ESI has a better Return On Assets (5.23%) than 77.11% of its industry peers.
ESI has a better Return On Equity (10.93%) than 73.49% of its industry peers.
ESI's Return On Invested Capital of 5.45% is in line compared to the rest of the industry. ESI outperforms 59.04% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ESI is below the industry average of 7.24%.
The last Return On Invested Capital (5.45%) for ESI is above the 3 year average (5.01%), which is a sign of increasing profitability.
| Industry Rank | Sector 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%
1.3 Margins
With an excellent Profit Margin value of 11.08%, ESI belongs to the best of the industry, outperforming 86.75% of the companies in the same industry.
In the last couple of years the Profit Margin of ESI has grown nicely.
The Operating Margin of ESI (13.49%) is better than 77.11% of its industry peers.
ESI's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 41.56%, ESI belongs to the top of the industry, outperforming 83.13% of the companies in the same industry.
In the last couple of years the Gross Margin of ESI has declined.
| Industry Rank | Sector 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%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ESI is destroying value.
Compared to 1 year ago, ESI has more shares outstanding
Compared to 5 years ago, ESI has less shares outstanding
ESI has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.00 indicates that ESI is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of ESI (2.00) is better than 60.24% 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 (7.04) which is in line with 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 (0.78) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 7.04 | ||
| Altman-Z | 2 |
ROIC/WACC0.72
WACC7.53%
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.
Looking at the Current ratio, with a value of 3.52, ESI belongs to the top of the industry, outperforming 87.95% of the companies in the same industry.
ESI has a Quick Ratio of 2.77. This indicates that ESI is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.77, ESI belongs to the top of the industry, outperforming 89.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.52 | ||
| Quick Ratio | 2.77 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.90% over the past year.
The Earnings Per Share has been growing by 19.47% 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 3.11% in the last 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 13.47% on average per year.
ESI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.49% yearly.
EPS Next Y12.51%
EPS Next 2Y12.49%
EPS Next 3Y13.47%
EPS Next 5YN/A
Revenue Next Year3.42%
Revenue Next 2Y4.36%
Revenue Next 3Y4.49%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 17.94, ESI is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of ESI is on the same level as its industry peers.
When comparing the Price/Earnings ratio of ESI to the average of the S&P500 Index (27.20), we can say ESI is valued slightly cheaper.
ESI is valuated correctly with a Price/Forward Earnings ratio of 15.49.
ESI's Price/Forward Earnings is on the same level as the industry average.
ESI's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.73.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.94 | ||
| Fwd PE | 15.49 |
4.2 Price Multiples
67.47% of the companies in the same industry are cheaper than ESI, based on the Enterprise Value to EBITDA ratio.
ESI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.39 | ||
| EV/EBITDA | 15.78 |
4.3 Compensation for Growth
ESI's 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.
A more expensive valuation may be justified as ESI's earnings are expected to grow with 13.47% in the coming years.
PEG (NY)1.43
PEG (5Y)0.92
EPS Next 2Y12.49%
EPS Next 3Y13.47%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.26%, ESI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.35, ESI has a dividend in line with its industry peers.
With a Dividend Yield of 1.26, ESI pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
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 29.29% of its income as dividend. This is a sustainable payout ratio.
DP29.29%
EPS Next 2Y12.49%
EPS Next 3Y13.47%
ELEMENT SOLUTIONS INC
NYSE:ESI (12/20/2024, 8:07:32 PM)
Premarket: 24.7 -0.59 (-2.33%)25.29
-0.03 (-0.12%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryChemicals
Earnings (Last)
Earnings (Next)
Inst Owners94.07%
Inst Owner Change-2.79%
Ins Owners7.79%
Ins Owner Change0%
Market Cap6.12B
Analysts81.33
Price Target32.5 (28.51%)
Short Float %0.71%
Short Ratio1.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.26% |
Dividend Growth(5Y)N/A
DP29.29%
Div Incr Years0
Div Non Decr Years3
Ex-Date
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)2.13%
PT rev (3m)2.42%
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)-0.04%
Revenue NY rev (3m)0.33%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.94 | ||
| Fwd PE | 15.49 | ||
| P/S | 2.55 | ||
| P/FCF | 22.39 | ||
| P/OCF | 18.23 | ||
| P/B | 2.51 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.78 |
EPS(TTM)1.41
EY5.58%
EPS(NY)1.63
Fwd EY6.45%
FCF(TTM)1.13
FCFY4.47%
OCF(TTM)1.39
OCFY5.49%
SpS9.94
BVpS10.07
TBVpS-2.33
PEG (NY)1.43
PEG (5Y)0.92
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 |
F-Score8
WACC7.53%
ROIC/WACC0.72
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 5YN/A
Revenue 1Y (TTM)3.11%
Revenue growth 3Y7.97%
Revenue growth 5Y3.54%
Sales Q2Q%7.63%
Revenue Next Year3.42%
Revenue Next 2Y4.36%
Revenue Next 3Y4.49%
Revenue Next 5YN/A
EBIT growth 1Y25.68%
EBIT growth 3Y2.91%
EBIT growth 5Y0.41%
EBIT Next Year36.1%
EBIT Next 3Y18.15%
EBIT Next 5YN/A
FCF growth 1Y3.6%
FCF growth 3Y6.78%
FCF growth 5YN/A
OCF growth 1Y6.53%
OCF growth 3Y8.72%
OCF growth 5YN/A