ALB  Albemarle Corporation

Exchange

NYSE

Sector

Basic Industries

Industry

Major Chemicals

Market Cap.

15.60B

Vuru Grade

48.05/100

Current Price

$141.22
+0.33 (+0.23%)

Growth Price

$52.64
Overvalued by 62.73%

Stability Price

$9.02
Overvalued by 93.61%

Company Metrics

  • P/E 18.06
  • P/S 5.54
  • P/B 4.14
  • EPS 7.82
  • Cash ROIC 11.09%
  • Cash Ratio 1.99
  • Dividend 1.28 / 0.92%
  • Avg. Vol. 1.38M
  • Shares 110.47M
  • Market Cap. 15.60B

Company Description

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals in the United States and internationally. The company operates in three segments: Polymer Solutions, Catalysts, and Fine Chemistry. The Polymer Solutions segment provides brominated, mineral, and phosphorus based flame retardants used in plastic enclosures for consumer electronics, printed circuit boards, wire... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Jefferies Group LLC Raises Albemarle Corporation (ALB) Price Target to $162.00
Dispatch Tribunal - Sep 6, 2017
Albemarle Corporation logo Albemarle Corporation (NYSE:ALB) had its price target hoisted by Jefferies Group LLC from $156.00 to $162.00 in a research report sent to investors on Tuesday.
Analyst's Bullish on these two stock Following meeting with Industry ... - StockNewsJournal
Albemarle Up on Plans for Higher Lithium Production - Investing News Network
Albemarle Corp. Vs. FMC Corp. - What's The Better Lithium Play?
Seeking Alpha - Nov 7, 2017
I was recently asked to give a comparison of two major lithium players, FMC Corporation (NYSE: FMC) versus Albemarle Corporation (NYSE: ALB), and my general opinion about each going further. For my opinion on FMC, please refer to my previously ...
Albemarle announces quarterly dividend - PR Newswire (press release)
Albemarle Corporation (ALB) Moves Lower on Volume Spike for November 02 - Equities.com
Albemarle: Mining For Growth
Seeking Alpha - Nov 9, 2017
You might remember Albermarle (ALB) from such things as the white-hot lithium growth story, the increase in electric vehicle (EV) demand and production, and Tesla (NASDAQ:TSLA).
Albemarle Will Be Unaffected By Tesla's Potential Problems
Seeking Alpha - Nov 8, 2017
The future of this one company is often being portrayed as being one of the main factors driving the EV demand story in years to come, therefore also the lithium demand growth story as well, given that the EV trend is now the main driver of lithium demand.
Albemarle Corporation (ALB) Dips 2.59% for November 09 - Equities.com
Searching for the most successful stocks? Check: Albemarle Corporation (NYSE:ALB) - The News Journal
Albemarle Corporation reports third-quarter financials
Magnoliareporter - Nov 9, 2017
Albemarle Corporation reported third quarter 2017 net sales of $754.9 million, earnings of $118.7 million and adjusted EBITDA of $209.4 million.
Albemarle -2.7% as Deutsche downgrades, foresees lithium pricing pressure
Seeking Alpha - Nov 14, 2017
Albemarle (NYSE:ALB) -2.7% premarket after Deutsche Bank downgrades shares to Hold from Buy while raising its stock price target to $150, as the firm believes the stock is fully valued.
Albemarle Corporation (ALB) Moves Lower on Volume Spike for November 15 - Equities.com
Comparable Company Analysis: Albemarle Corporation (ALB), Ball Corporation (BLL)
AllStockNews - 14 hours ago
Albemarle Corporation (NYSE:ALB) shares were trading lower by -0.59 percent ($-0.81) at $135.4 a piece in Monday's session.
Critical Comparison: Albemarle Corporation (ALB) vs. Kronos Worldwide, Inc. (KRO) - StockNewsGazette
Frontier Capital Management Co. LLC Sells 3248 Shares of Albemarle Corporation ... - StockNewsTimes
5 Reasons That Make Albemarle (ALB) a Solid Choice Now
Nasdaq - Nov 20, 2017
Albemarle has also outperformed the industry it belongs to over a year, partly reflecting its forecast-topping earnings performance and its strategic growth initiatives.
Albemarle Corporation to present at the 2017 Deutsche Bank Lithium Supply ...
Markets Insider - Oct 25, 2017
CHARLOTTE, N.C., Oct. 24, 2017 /PRNewswire/ -- Albemarle Corporation (NYSE: ALB), a leader in the global specialty chemicals industry, announced today that Matt Juneau, executive vice president, Corporate Strategy and Investor Relations, will present ...
How Have Institutional Investors Been Trading Albemarle Corporation (ALB)? - Economic News
Digging Through Albemarle Corporation (NYSE:ALB) Technicals - AllStockNews
Valvoline Inc., (NYSE: VVV), Albemarle Corporation, (NYSE: ALB), DTE Energy ...
Stocks In The News (press release) - 1 hour ago
The Basic Materials stock (Valvoline Inc.) showed a change of -0.29 percent from opening and finally turned off its business at $24.42 by scoring 0.21 percent on Tuesday.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for ALB to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate ALB's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$141.22 Current Price

$52.64 Growth Price (DCF)

Overvalued by 62.73%


Growth Rate Assumed by Market: 45.60%


Future Free Cash Flow Growth Rate: 3.4%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$9.02 Stability Price (EPV)

Overvalued by 93.61%


Discount Rate: 15.0%

$101.88 Book Price

Overvalued by 27.86%


Inconsistent Cash Return on Invested Capital over the past 5 years

ALB has somewhat efficiently invested its financial resources in buildings, projects, and equipment. However, there has been some inconsistency from year-to-year. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

ALB has created $11.09 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 207.89M 277.51M 382.03M 133.04M 536.75M
divided by
Invested Capital 2.57B 2.67B 1.59B 7.78B 4.75B
Cash ROIC 8.07% 10.39% 23.98% 1.71% 11.30%

Excellent Return on Equity over the past 5 years

Over the past 5 years, ALB has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

ALB has generated $16.82 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 330.13M 439.83M 230.44M 360.06M 419.00M
divided by
Stockholders' Equity 1.83B 1.63B 1.36B 3.25B 3.80B
Return on Equity 18.00% 27.03% 16.95% 11.06% 11.04%

Excellent Business Performance over the past 10 years

ALB has been able to maintain profitability in good times and bad. This could mean ALB has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

ALB has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 143.80M 216.01M 257.74M 255.83M 296.79M 207.89M 277.51M 382.03M 133.04M 536.75M

Weak Balance Sheet

ALB's financial position is not ideal. The key is to check whether ALB is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 130.55M 253.30M 308.79M 529.65M 469.42M 477.70M 477.24M 2.49B 213.73M 2.27B
Current Assets 1.05B 1.18B 1.03B 1.35B 1.36B 1.41B 1.48B 3.35B 1.83B 3.31B
Total Assets 2.83B 2.87B 2.77B 3.07B 3.20B 3.44B 3.58B 5.22B 9.62B 8.16B
Current Liabilities 402.92M 438.37M 353.26M 364.18M 401.18M 385.01M 436.36M 1.14B 1.62B 1.14B
Total Liabilities 1.55B 1.81B 1.57B 1.65B 1.61B 1.60B 1.96B 3.86B 6.36B 4.37B
Stockholder' Equity 1.28B 1.07B 1.21B 1.42B 1.59B 1.83B 1.63B 1.36B 3.25B 3.80B
Current Ratio 2.61 2.69 2.92 3.70 3.38 3.66 3.40 2.94 1.13 2.90
TL-to-TA 0.55 0.63 0.56 0.54 0.50 0.47 0.55 0.74 0.66 0.53

Consistent Reinvestment of Profits over the past 10 years

ALB has consistently retained profits. This may put ALB in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, ALB can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 1.02B 1.17B 1.29B 1.56B 1.80B 1.74B 1.50B 1.41B 1.62B 2.12B
Retained Earnings Growth - 13.93% 10.51% 21.16% 15.23% -2.97% -14.00% -5.98% 14.52% 31.36%

Potential Competitive Advantage over the past 10 years

ALB potentially has a competitive advantage. This could be strong branding, the ability to keep costs low, or some other characteristic that is hard to replicate. Look at its future prospects to determine sustainability and whether the economic moat will strengthen.

$11.93 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 229.69M 194.20M 178.37M 323.72M 436.28M 330.13M 439.83M 230.44M 360.06M 419.00M
divided by
Revenue 2.34B 2.47B 2.01B 2.36B 2.87B 2.75B 2.62B 2.45B 3.65B 2.68B
Net Profit Margin 9.83% 7.87% 8.89% 13.70% 15.21% 12.02% 16.81% 9.42% 9.86% 15.65%

Inconsistent Gross Profit Margins over the past 10 years

ALB has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$37.09 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 622.49M 607.67M 483.86M 745.92M 2.79B 910.00M 861.41M 770.85M 1.20B 970.58M
divided by
Revenue 2.34B 2.47B 2.01B 2.36B 2.87B 2.75B 2.62B 2.45B 3.65B 2.68B
Gross Margin 26.65% 24.63% 24.13% 31.57% 97.31% 33.15% 32.92% 31.52% 32.78% 36.25%

Medium Capital Intensity over the past 10 years

ALB has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

49.64% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 98.74M 99.74M 100.79M 75.48M 190.57M 280.87M 155.35M 110.58M 227.65M 196.65M
divided by
Net Income 229.69M 194.20M 178.37M 323.72M 436.28M 330.13M 439.83M 230.44M 360.06M 419.00M
Capital Expenditure Ratio 42.99% 51.36% 56.50% 23.32% 43.68% 85.08% 35.32% 47.99% 63.22% 46.93%

Very Strong Dividend History over the past 10 years

ALB has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests ALB is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 40.03M 55.94M 56.14M 49.64M 57.76M 76.74M 88.12M 99.64M 142.59M 135.35M
divided by
Shares Outstanding 97.22M 92.53M 92.05M 92.18M 91.52M 89.88M 84.32M 79.10M 111.56M 113.24M
Dividend Paid Per Share 0.41 0.60 0.61 0.54 0.63 0.85 1.05 1.26 1.28 1.20
Price at Year End 39.65 19.77 36.10 55.42 51.51 60.89 63.26 60.80 56.34 86.08
Dividend Yield 1.04% 3.06% 1.69% 0.97% 1.23% 1.40% 1.65% 2.07% 2.27% 1.39%

Strong History of Stock Buybacks over the past 10 years

ALB has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 97.22M 92.53M 92.05M 92.18M 91.52M 89.88M 84.32M 79.10M 111.56M 113.24M
Stock Bought Back - 5.06% 0.53% -0.15% 0.72% 1.82% 6.60% 6.60% -29.09% -1.49%
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