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Ingevity (NGVT) Gains on Demand Strength and Growth Actions

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Ingevity Corporation (NGVT - Free Report) is poised to benefit from higher demand and prices in its industrial specialties and engineered polymers businesses and its actions to drive growth.

Shares of Ingevity, a Zacks Rank #2 (Buy) stock, are down 6.4% over the past year against the 16.6% decline of its industry.

 

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Ingevity is benefiting from a recovery in demand for its products from the pandemic-induced slowdown, which is leading to higher volumes and prices. The company’s Performance Chemicals segment is riding on solid demand as well as higher selling prices in engineered polymers and industrial specialties. The company is also benefiting from increased demand for process purification products in the Performance Materials unit. Strong demand is expected to continue to support its top line and margins moving ahead.

Ingevity is also taking a number of actions to drive long-term growth. It remains committed to invest organically. The company also remains focused on optimizing its operations and inventory to provide outstanding service to customers. It is also taking price hike actions to mitigate cost inflation. Ingevity is also committed to capturing the maximum value for its products.

The acquisition of Ozark Materials will also strengthen the company’s position in the paving construction industry and enable it to better serve its customers. Ozark Materials is a leading manufacturer of pavement marking materials, including thermoplastic pavement markings, waterborne traffic paints and preformed thermoplastics. Ingevity expects the entity to generate revenues of around $150 million and EBITDA margins of roughly 20% in calendar 2023.

The company’s $60 million investment to buy an equity stake in Nexeon Limited also establishes its presence in the electric vehicle (EV) market along with providing opportunities to expand its activated carbon business. The company’s investment includes a commitment to jointly develop technology for EVs using Ingevity’s activated carbon to improve the performance of lithium-ion batteries.

 

 

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and The Chemours Company (CC - Free Report) .

Albemarle, currently sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 425.7% for the current year. The consensus estimate for ALB's current-year earnings has been revised 67.9% 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 last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 27% in a year.

Sociedad has a projected earnings growth rate of 530.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 18.8% upward in the past 60 days.

Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 20.7%. SQM has rallied roughly 89% in a year. The company currently carries a Zacks Rank #2.

Chemours has a projected earnings growth rate of 40% for the current year. The Zacks Consensus Estimate for CC's current-year earnings has been revised 6.9% upward in the past 60 days.

Chemours’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 28.3%, on average. CC has gained around 11% in a year and presently carries a Zacks Rank #2.

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