CEO At PolyOne Has Stepped Up Company's Pace

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In business, price and quality aren't everything.

A company also has to deliver the goods on time.

When Stephen Newlin became CEO atPolyOne ( POL ) in late February 2006, the company's on-time delivery rate was 81%. The corporate culture had a attitude of that's good enough.

Although 81% was in line with the industry average, Newlin challenged the company to aim for 95%.

In his 2011 letter to shareholders, Newlin reported that on-time delivery was now at 94%. He added that it was achieved via operational planning and efficiencies, not by stockpiling inventory.

PolyOne's stock is up about 90% during Newlin's reign vs. 36% for the Nasdaq and 14% for the S&P 500.

The stock is in IBD's 85-85 index.

The company provides specialized polymer materials for the plastics industry. The Chemicals-Plastics industry group was No. 7 of 197 industry groups as of Monday's IBD. PolyOne has an EPS Rating of 89, the best in the group.

Based in Ohio, PolyOne has business in the Americas, Europe and Asia.

Europe has posed some problems. In the second quarter, volumes fell 6.4% because of weak demand on the Continent. Meanwhile, unfavorable currency exchange rates dented sales 2.2%.

Overall, company sales grew 3%, the smallest gain since late 2009.

The Europe effect might've been worse if not for actions taken in Q1. The company began hedging to lessen the impact of currency exchange rates.

In December 2011, the company acquired ColorMatrix, a manufacturer of performance-enhancing additives for plastic products and colorants.

ColorMatrix has higher margins than PolyOne's other segments. In Q2, after-tax margin was 4.2%, the highest in at least 17 quarters. Pretax margin was 5.1% last year, the highest in at least nine years.

Return on equity, a gauge of financial efficiency, was 17.4%.

In February, PolyOne announced it was increasing its quarterly dividend from 4 cents a share to 5 cents a share. The annualized dividend yield is 1.2%.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: POL

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