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Here's Why You Should Buy Ingevity (NGVT) Stock Right Now
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Ingevity Corporation’s (NGVT - Free Report) stock looks promising at the moment. It is benefiting from technology-driven adoption of its applications, higher sales in China in the wake of the implementation of the China 6 standard, and the acquisitions of the Capa caprolactone and the Georgia-Pacific pine chemical business.
We are positive about the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it is poised to carry the momentum ahead.
Let's see what makes this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.
Price Performance
Shares of Ingevity have surged 54.1% over the past year against a 14.6% decline of the industry. It has also outperformed the S&P 500’s 40.5% rise over the same period.
Image Source: Zacks Investment Research
Upward Estimate Revisions
Earnings estimate revisions have the greatest impact on stock prices. Over the past three months, the Zacks Consensus Estimate for Ingevity’s earnings for the current year has increased around 4.7%. The consensus mark for 2022 earnings has also been revised roughly 4.2% upward over the same time frame.
Positive Earnings Surprise History
Ingevity has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 49.2%, on average.
Attractive Valuation
Valuation looks attractive as the company’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.
Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, Ingevity is currently trading at a trailing 12-month EV/EBITDA multiple of 10.26, cheaper compared with the industry average of 29.29.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder funds. ROE for the trailing 12 months for Ingevity is 33.9%, above the industry’s level of 11.2%.
Upbeat Prospects
Ingevity stands to gain from value-creating acquisitions. The acquisition of Georgia-Pacific’s pine chemicals unit has brought synergies through manufacturing optimization, lowered logistics costs and leveraged procurement costs. Also, the buyout of the Capa caprolactone business enabled Ingevity with a new technology platform to drive revenue and earnings growth. Capa has a strong and market-leading business that focuses on high-growth end-use applications and this should act as a tailwind.
The company also saw a strong rise in automotive-based activated carbon sales and significant growth in engineered polymers across several applications in the first quarter of 2021. Strong global automotive sales drove growth for its activated carbon products used in gasoline vapor emission control systems. The first-quarter revenues were $320.3 million, rising 11% year over year.
Moreover, Ingevity is benefiting from higher sales in China, as automakers in the country have completed the implementation of the China 6 standard. Its sales in China roughly doubled year over year in the first quarter on strong automotive production and the momentum is expected to persist through 2021.
The company, in April, also raised its outlook for 2021 sales to $1.275-$1.325 billion from $1.25-$1.30 billion expected earlier. It also now anticipates adjusted EBITDA of $410-$430 million, up from the prior view of $400-$420 million.
Univar has a projected earnings growth rate of 35.2% for the current year. The company’s shares have risen 46.8% in a year.
Olin has a projected earnings growth rate of 506.7% for the current year. The company’s shares have skyrocketed 321.3% in a year.
Tronox has a projected earnings growth rate of 242.9% for the current year. The company’s shares have jumped 199.4% in a year.
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Here's Why You Should Buy Ingevity (NGVT) Stock Right Now
Ingevity Corporation’s (NGVT - Free Report) stock looks promising at the moment. It is benefiting from technology-driven adoption of its applications, higher sales in China in the wake of the implementation of the China 6 standard, and the acquisitions of the Capa caprolactone and the Georgia-Pacific pine chemical business.
We are positive about the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it is poised to carry the momentum ahead.
Let's see what makes this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.
Price Performance
Shares of Ingevity have surged 54.1% over the past year against a 14.6% decline of the industry. It has also outperformed the S&P 500’s 40.5% rise over the same period.
Upward Estimate Revisions
Earnings estimate revisions have the greatest impact on stock prices. Over the past three months, the Zacks Consensus Estimate for Ingevity’s earnings for the current year has increased around 4.7%. The consensus mark for 2022 earnings has also been revised roughly 4.2% upward over the same time frame.
Positive Earnings Surprise History
Ingevity has outpaced the Zacks Consensus Estimate in three of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 49.2%, on average.
Attractive Valuation
Valuation looks attractive as the company’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential.
Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, Ingevity is currently trading at a trailing 12-month EV/EBITDA multiple of 10.26, cheaper compared with the industry average of 29.29.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder funds. ROE for the trailing 12 months for Ingevity is 33.9%, above the industry’s level of 11.2%.
Upbeat Prospects
Ingevity stands to gain from value-creating acquisitions. The acquisition of Georgia-Pacific’s pine chemicals unit has brought synergies through manufacturing optimization, lowered logistics costs and leveraged procurement costs. Also, the buyout of the Capa caprolactone business enabled Ingevity with a new technology platform to drive revenue and earnings growth. Capa has a strong and market-leading business that focuses on high-growth end-use applications and this should act as a tailwind.
The company also saw a strong rise in automotive-based activated carbon sales and significant growth in engineered polymers across several applications in the first quarter of 2021. Strong global automotive sales drove growth for its activated carbon products used in gasoline vapor emission control systems. The first-quarter revenues were $320.3 million, rising 11% year over year.
Moreover, Ingevity is benefiting from higher sales in China, as automakers in the country have completed the implementation of the China 6 standard. Its sales in China roughly doubled year over year in the first quarter on strong automotive production and the momentum is expected to persist through 2021.
The company, in April, also raised its outlook for 2021 sales to $1.275-$1.325 billion from $1.25-$1.30 billion expected earlier. It also now anticipates adjusted EBITDA of $410-$430 million, up from the prior view of $400-$420 million.
Ingevity Corporation Price and Consensus
Ingevity Corporation price-consensus-chart | Ingevity Corporation Quote
Other Stocks to Consider
Other top-ranked stocks in the basic materials space are Univar Solutions Inc. , Olin Corporation (OLN - Free Report) and Tronox Holdings PLC (TROX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Univar has a projected earnings growth rate of 35.2% for the current year. The company’s shares have risen 46.8% in a year.
Olin has a projected earnings growth rate of 506.7% for the current year. The company’s shares have skyrocketed 321.3% in a year.
Tronox has a projected earnings growth rate of 242.9% for the current year. The company’s shares have jumped 199.4% in a year.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>