ALB  Albemarle Corporation

Exchange

NYSE

Sector

Basic Industries

Industry

Major Chemicals

Market Cap.

10.45B

Vuru Grade

48.44/100

Current Price

$92.93
+0.52 (+0.56%)

Growth Price

$37.37
Overvalued by 59.78%

Stability Price

$12.78
Overvalued by 86.25%

Company Metrics

  • P/E 48.65
  • P/S 2.95
  • P/B 3.15
  • EPS 1.91
  • Cash ROIC 11.37%
  • Cash Ratio 0.13
  • Dividend 1.22 / 1.32%
  • Avg. Vol. 834,431.00
  • Shares 112.45M
  • Market Cap. 10.45B

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

Analyst Activity – RBC Capital Markets Initiates Coverage On Albemarle ...
Market Exclusive - Feb 24, 2017
Today, RBC Capital Markets initiated coverage on Albemarle Corporation (NYSE:ALB) with a Outperform with a price target of $114.00.
Albemarle Corporation bumps dividend to 32 cents per share - Magnoliareporter
Albemarle Corporation to release fourth quarter 2016 earnings results on ...
PR Newswire (press release) - Jan 18, 2017
CHARLOTTE, N.C., Jan. 18, 2017 /PRNewswire/ -- Albemarle Corporation (NYSE: ALB), a leader in the global specialty chemicals industry, announced today that it will release its fourth quarter 2016 earnings after the NYSE closes on Monday, February 27, ...
Albemarle upgraded at Baird amid growing lithium market - Seeking Alpha
Albemarle (ALB) Intends to Redeem Senior Notes Due 2019 - Zacks.com
Albemarle Corporation Announces 2017 Investor Day in New York City
Yahoo Finance - Jan 19, 2017
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Albemarle Corporation's business that are not historical facts are "forward-looking statements" that involve risks and ...
Albemarle Corporation Announces Pricing of Maximum Tender Offers - PR Newswire (press release)
The World's Largest Lithium Supplier, Albemarle Corporation, Delivers Solid Q3 ...
Motley Fool - Nov 10, 2016
Albemarle Corporation (NYSE: ALB), the world's largest supplier of lithium, reported third-quarter earnings on Monday, Nov. 7. Like fellow big lithium player FMC Corp.
Albemarle, FMC Corp. started at Outperform by RBC
Seeking Alpha - Feb 24, 2017
Specialty chemicals companies Albemarle (ALB -0.1%) and FMC Corp. (FMC -0.8%) are initiated with Outperform ratings at RBC Capital (I, II) despite recent run-ups in the shares; price targets are $114 and $71, respectively.
PODCAST: Albemarle Corporation CEO Luke Kissam on becoming the world's lithium ...
Midas Letter - Feb 16, 2017
James West: Luke, Albemarle is positioning itself to be the major global provider of lithium, especially to the lithium ion battery segment.
Albemarle and Tianqi terminate option for indirect minority interest in ...
PR Newswire (press release) - Feb 22, 2017
CHARLOTTE, N.C., Feb. 22, 2017 /PRNewswire/ -- Albemarle Corporation (NYSE: ALB), a premier specialty chemicals company, announced today that Albemarle and Tianqi Lithium Corporation (Tianqi) have entered into a deed of termination, pursuant to ...
Trading Covered Calls: Albemarle Corporation (NYSE:ALB) : Using Covered Calls ...
CML News - Feb 24, 2017
As we look at Albemarle Corporation we note that a covered call is one of the most common implementations of an option strategy, but the analysis completed when employing the covered call often times lacks the necessary rigor especially surrounding ...
Albemarle Corporation (ALB) Moves Lower on Volume Spike for January 31
Equities.com - Jan 31, 2017
Albemarle Corporation (ALB) traded on unusually high volume on Jan. 31, as the stock lost 2.04% to close at $92.64. On the day, Albemarle Corporation saw 1.45 million shares trade hands on 11,302 trades. Considering that the stock averages only a daily ...
Albemarle Corporation (NYSE:ALB) PEG Ratio At 2.90 - Equities Focus
Albemarle Corporation (ALB) Moves Lower on Volume Spike for February 14
Equities.com - Feb 14, 2017
Albemarle Corporation (ALB) traded on unusually high volume on Feb. 14, as the stock lost 3.76% to close at $91.19. On the day, Albemarle Corporation saw 1.65 million shares trade hands on 16,357 trades. Considering that the stock averages only a daily ...
Keybank National Association OH Sells 7969 Shares of Albemarle Corporation (ALB) - The Cerbat Gem
Caldwell & Orkin Inc. Lowers Position in Albemarle Corporation (ALB) - Sports Perspectives
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.

$92.93 Current Price

$37.37 Growth Price (DCF)

Overvalued by 59.78%


Growth Rate Assumed by Market: 51.10%


Future Free Cash Flow Growth Rate: 2.6%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$12.78 Stability Price (EPV)

Overvalued by 86.25%


Discount Rate: 15.0%

$90.56 Book Price

Fairly valued


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 $11.37 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 296.79M 207.89M 277.51M 382.03M 133.04M
divided by
Invested Capital 2.33B 2.57B 2.67B 1.59B 7.78B
Cash ROIC 12.72% 8.07% 10.39% 23.98% 1.71%

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 $20.09 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 436.28M 330.13M 439.83M 230.44M 360.06M
divided by
Stockholders' Equity 1.59B 1.83B 1.63B 1.36B 3.25B
Return on Equity 27.42% 18.00% 27.03% 16.95% 11.06%

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
2006200720082009201020112012201320142015
Free Cash Flow 276.45M 143.80M 216.01M 257.74M 255.83M 296.79M 207.89M 277.51M 382.03M 133.04M

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
2006200720082009201020112012201320142015
Cash 149.50M 130.55M 253.30M 308.79M 529.65M 469.42M 477.70M 477.24M 2.49B 213.73M
Current Assets 960.85M 1.05B 1.18B 1.03B 1.35B 1.36B 1.41B 1.48B 3.35B 1.83B
Total Assets 2.53B 2.83B 2.87B 2.77B 3.07B 3.20B 3.44B 3.58B 5.22B 9.62B
Current Liabilities 482.95M 402.92M 438.37M 353.26M 364.18M 401.18M 385.01M 436.36M 1.14B 1.62B
Total Liabilities 1.50B 1.55B 1.81B 1.57B 1.65B 1.61B 1.60B 1.96B 3.86B 6.36B
Stockholder' Equity 1.03B 1.28B 1.07B 1.21B 1.42B 1.59B 1.83B 1.63B 1.36B 3.25B
Current Ratio 1.99 2.61 2.69 2.92 3.70 3.38 3.66 3.40 2.94 1.13
TL-to-TA 0.59 0.55 0.63 0.56 0.54 0.50 0.47 0.55 0.74 0.66

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
2006200720082009201020112012201320142015
Retained Earnings 838.16M 1.02B 1.17B 1.29B 1.56B 1.80B 1.74B 1.50B 1.41B 1.62B
Retained Earnings Growth - 22.06% 13.93% 10.51% 21.16% 15.23% -2.97% -14.00% -5.98% 14.52%

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.

$10.97 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 142.97M 229.69M 194.20M 178.37M 323.72M 436.28M 330.13M 439.83M 230.44M 360.06M
divided by
Revenue 2.37B 2.34B 2.47B 2.01B 2.36B 2.87B 2.75B 2.62B 2.45B 3.65B
Net Profit Margin 6.04% 9.83% 7.87% 8.89% 13.70% 15.21% 12.02% 16.81% 9.42% 9.86%

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.

$35.79 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
2006200720082009201020112012201320142015
Gross Profit 550.81M 622.49M 607.67M 483.86M 745.92M 2.79B 910.00M 861.41M 770.85M 1.20B
divided by
Revenue 2.37B 2.34B 2.47B 2.01B 2.36B 2.87B 2.75B 2.62B 2.45B 3.65B
Gross Margin 23.26% 26.65% 24.63% 24.13% 31.57% 97.31% 33.15% 32.92% 31.52% 32.78%

High Capital Intensity over the past 10 years

ALB spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

51.93% 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
2006200720082009201020112012201320142015
Capital Expenditure 99.85M 98.74M 99.74M 100.79M 75.48M 190.57M 280.87M 155.35M 110.58M 227.65M
divided by
Net Income 142.97M 229.69M 194.20M 178.37M 323.72M 436.28M 330.13M 439.83M 230.44M 360.06M
Capital Expenditure Ratio 69.84% 42.99% 51.36% 56.50% 23.32% 43.68% 85.08% 35.32% 47.99% 63.22%

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
2006200720082009201020112012201320142015
Dividend Paid 31.58M 40.03M 55.94M 56.14M 49.64M 57.76M 76.74M 88.12M 99.64M 142.59M
divided by
Shares Outstanding 97.14M 97.22M 92.53M 92.05M 92.18M 91.52M 89.88M 84.32M 79.10M 111.56M
Dividend Paid Per Share 0.33 0.41 0.60 0.61 0.54 0.63 0.85 1.05 1.26 1.28
Price at Year End 33.48 39.65 19.77 36.10 55.42 51.51 60.89 63.26 60.80 56.34
Dividend Yield 0.97% 1.04% 3.06% 1.69% 0.97% 1.23% 1.40% 1.65% 2.07% 2.27%

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
2006200720082009201020112012201320142015
Shares Outstanding 97.14M 97.22M 92.53M 92.05M 92.18M 91.52M 89.88M 84.32M 79.10M 111.56M
Stock Bought Back - -0.08% 5.06% 0.53% -0.15% 0.72% 1.82% 6.60% 6.60% -29.09%
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