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What Makes Ashland (ASH) Stock a Solid Choice Right Now

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Ashland Global Holdings Inc.’s (ASH - Free Report) stock looks promising at the moment. It is gaining from strong demand across its end markets and disciplined pricing actions.

We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.

Let’s take a look into the factors that make this Zacks Rank #1 (Strong Buy) stock an attractive choice for investors right now.

An Outperformer

Shares of Ashland have gained 17.7% over the past year against the 22.9% decline of its industry. It has also outperformed the S&P 500’s roughly 11.8% decline over the same period.

 

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Estimates Northbound

Over the past three months, the Zacks Consensus Estimate for Ashland for fiscal 2022 has increased around 4.7%. The consensus estimate for fiscal 2023 has also been revised 3.5% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.

Healthy Growth Prospects

The Zacks Consensus Estimate for earnings for fiscal 2022 for Ashland is currently pegged at $5.12, reflecting an expected year-over-year growth of 36.5%. Moreover, earnings are expected to register a 14.7% growth in fiscal 2023.

Growth Drivers in Place

The company is benefiting from strong demand in most consumer end markets. Its industrial businesses are witnessing strong demand recovery. Ashland is seeing higher demand across core personal-care end markets. The company, in its fiscal second quarter call, noted that it expects underlying demand to remain strong for its focused ingredients and additives product portfolio. The company is also gaining from the contributions from the Schulke & Mayr acquisition.

Ashland’s restructuring actions have also provided it with a profitable, high-margin portfolio focused on high-quality markets and better positioned it for future growth. The company is also taking a number of actions including reduction of operating costs to boost profitability. Cost-reduction measures are expected to support its margins in fiscal 2022. The company’s pricing and mix improvement actions are also helping it to counter the current inflation.

Ashland also remains committed to boosting its cash flows and returning value to shareholders. The company remains focused on expanding margins and improving free cash flow conversion. It recently raised its quarterly cash dividend by 12% to 33.5 cents per share. The company’s board also authorized a new, evergreen $500-million common stock repurchase program. The new authorization discontinues and replaces Ashland’s 2018 $1-billion share buyback program.

 

 

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Cabot Corporation (CBT - Free Report) and Nutrien Ltd. (NTR - Free Report) .

Albemarle has a projected earnings growth rate of 231.7% for the current year. The Zacks Consensus Estimate for ALB’s current-year earnings has been revised 66.5% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 20%. ALB has rallied roughly 16% in a year. The company flaunts a Zacks Rank #1.

Cabot, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 22.5% for the current fiscal year. The Zacks Consensus Estimate for CBT's earnings for the current fiscal has been revised 4.2% upward in the past 60 days.

Cabot’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 16.2%. CBT has gained around 12% over a year.

Nutrien, carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 174.6% for the current year. The Zacks Consensus Estimate for NTR's current-year earnings has been revised 4.6% upward over the last 60 days.

Nutrien beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 5.8%, on average. NTR has gained roughly 26% in a year.


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Nutrien Ltd. (NTR) - free report >>

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