Albemarle Corp

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ALB : NYSE : Basic Materials
$81.79 | %
Today's Range: 81.33 - 83.52
Avg. Daily Volume: 1,733,700
08/26/16 - 4:02 PM ET

Financial Analysis


ALBEMARLE CORP's gross profit margin for the second quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. ALBEMARLE CORP has weak liquidity. Currently, the Quick Ratio is 0.59 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has remained unchanged from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)669.33718.29
EBITDA ($mil)209.5196.86
EBIT ($mil)141.55129.37
Net Income ($mil)-314.8252.15


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)193.66207.24
Total Assets ($mil)9312.389770.81
Total Debt ($mil)3513.183990.31
Equity ($mil)3156.623179.08


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin47.2242.71
EBITDA Margin31.327.4
Operating Margin21.1518.01
Sales Turnover0.340.27
Return on Assets1.641.53
Return on Equity16.914.69
Debt Q2 FY16 Q2 FY15
Current Ratio1.321.21
Debt/Capital0.530.56
Interest Expense15.820.6
Interest Coverage8.966.28


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)112.39112.19
Div / share0.310.29
EPS0.740.37
Book value / share28.0928.34
Institutional Own % n/a n/a
Avg Daily Volume1724888.01416911.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 25.27 for the Chemicals industry and a discount compared to the S&P 500 average of 25.30. To use another comparison, its price-to-book ratio of 3.00 indicates valuation on par with the S&P 500 average of 2.83 and a significant discount versus the industry average of 5.85. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, ALBEMARLE CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ALB 17.76 Peers 25.27   ALB 19.69 Peers 16.01

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ALB is trading at a significant discount to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ALB is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ALB 21.31 Peers 21.09   ALB 1.11 Peers 1.77

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

ALB is trading at a premium to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

ALB trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ALB 3.00 Peers 5.85   ALB 200.00 Peers 88.56

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ALB is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

ALB is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ALB 2.99 Peers 2.32   ALB 19.24 Peers -7.41

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ALB is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

ALB has a sales growth rate that significantly exceeds its peers.

 

 

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