Credit: Shutterstock photoOn May 16, Zacks Investment Research upgraded chemical maker, Innospec Inc.IOSP to a Zacks Rank #2 (Buy). Going by the Zacks model, companies carrying a Zacks Rank #2 have higher chances of outperforming the broader market.
Why the Upgrade?
Innospec posted a profit of $17.2 million or 70 cents per share in first-quarter 2017, down around 9% from $18.9 million or 77 cents a year ago. Barring one-time items, earnings were $1.00 per share for the quarter, coming ahead of the Zacks Consensus Estimate of 95 cents.
The company's revenues grew 39% year over year to $294.3 million in the quarter. The company witnessed higher sales across core business segments in the reported quarter.
Innospec Inc. Price and Consensus
Innospec Inc. Price and Consensus | Innospec Inc. Quote
Innospec is well positioned to record strong growth in all its businesses. The company will continue to integrate its recent acquisitions and will also pursue other strategic buyouts to boost its portfolio.
In the first quarter, Innospec noted that demand across Performance Chemicals, Oilfield Services and Octane Additives segments improved greatly. While sales of Performance Chemicals jumped three-fold year over year on the back of recent acquisitions, revenues from Oilfield Services and Octane Additives units surged 84% and 61% year over year, respectively, in the quarter.
The company also hiked its semi-annual dividend by 15% to 38 cents per common share for first-half 2017. The dividend will be paid on May 31 to shareholders of record as of May 22.
Innospec's shares have also rallied 34.7% in the last one year, outperforming the Zacks categorized Chemicals-Diversified industry's gain of 18.6%.
Other Stocks to Consider
Other top ranked companies in the basic materials space include Kronos Worldwide, Inc. KRO , Methanex Corporation MEOH and ArcelorMittal MT . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 stocks here .
Kronos has an expected long-term earnings growth of 5%.
Methanex has an expected long-term earnings growth of 15%.
ArcelorMittal has an expected long-term earnings growth of 11.4%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
