HUN  Huntsman Corporation

Exchange

NYSE

Sector

Basic Industries

Industry

Major Chemicals

Market Cap.

5.93B

Vuru Grade

23.50/100

Current Price

$24.75
-0.11 (-0.44%)

Growth Price

$23.29
Overvalued by 5.91%

Company Metrics

  • P/E 17.28
  • P/S 0.61
  • P/B 4.08
  • EPS 1.43
  • Cash ROIC 3.96%
  • Cash Ratio 0.23
  • Dividend 0.5 / 2.02%
  • Avg. Vol. 4.14M
  • Shares 239.60M
  • Market Cap. 5.93B

Company Description

Huntsman Corporation engages in the manufacture and sale of differentiated organic and inorganic chemical products worldwide. Its products comprise a range of chemicals and formulations, which are marketed to consumer and industrial customers. The company's products are used in various applications, including adhesives, aerospace, automotive, construction products, durable and non-durable consumer... more


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

News

Huntsman Is Said to Be Close to Merger With Clariant
New York Times - May 22, 2017
The Huntsman Corporation is close to a deal to merge with a Swiss counterpart, Clariant, and create a large trans-Atlantic chemical maker at a time of consolidation within the industry, a person briefed on the matter said Sunday evening.
Huntsman To Merge With Clariant - Seeking Alpha
Huntsman merger could create more Houston-area jobs, CEO says - Houston Chronicle
Huntsman Clariant Tie-Up To Unlock More Shareholder Value
Seeking Alpha - May 26, 2017
Huntsman (NYSE:HUN) was my top catalyst-driven pick for 2017 based off the upcoming spin-off of the TiO2 business (Venator), and there are many of us anxiously awaiting more detail in the next four to eight weeks regarding the fine details of that ...
Huntsman And Clariant To Merge, Venator IPO On Track
Forbes - May 23, 2017
On May 22, 2017, Boards of Directors of Huntsman Corporation (NYSE: HUN, $26.15, Market Capitalization: $6.3 billion) and Clariant AG (SIX: CLN, CHF 21.59, Market Capitalization: CHF 7.2 billion) announced a definitive agreement to combine in a merger ...
How The Mighty Are Growing: HuntsmanClariant - Seeking Alpha
Why Huntsman Corporation (HUN) Might Be a Diamond in the Rough
Nasdaq - May 26, 2017
One such company that looks well positioned for a solid gain, but has been overlooked by investors lately, is Huntsman Corporation HUN . This Chemical - Diversified stock has actually seen estimates rise over the past month for the current fiscal year ...
Performance Check on Shares of Huntsman Corporation (NYSE:HUN) - Business Daily
Upcoming/New CFIUS Filing: Clariant Ltd. and Huntsman Corporation
The National Law Review - May 24, 2017
Chemical_Lab On May 21, 2017, Huntsman Corporation, a Delaware corporation, and Clariant Ltd., a Swiss corporation, entered into an Agreement and Plan of Merger pursuant to which a wholly-owned subsidiary of Clariant will merge with and into ...
Huntsman And Clariant To Combine In Merger Of Equals - Textile World Magazine
Huntsman Acquires Leading UK Independent Polyurethane Formulations Company, IFS
PR Newswire (press release) - May 1, 2017
THE WOODLANDS, Texas, May 1, 2017 /PRNewswire/ -- Huntsman Corporation (NYSE: HUN) announced today that it has completed the acquisition of IFS Chemicals Limited (IFS), one of the UK's leading independent formulators of methylene diphenyl ...
Investors cool to Huntsman in Clariant merger deal
Seeking Alpha - May 22, 2017
WSJ Heard On The Street's Paul Davies favors the deal but questions the anticipated $400M cost savings; $250M is supposed to come from combined corporate functions and infrastructure but says the savings could be hard to find given the proposed ...
Huntsman: Venator IPO a 'Natural Inversion,' Creates Tax Edge
Bloomberg BNA - May 17, 2017
Huntsman Corp.'s Venator Materials' initial public offering will act as a “natural inversion” that will enable the company to take advantage of lower tax rates, a Huntsman executive said.
Huntsman Announces Public Filing of Registration Statement for Proposed ...
PR Newswire (press release) - May 5, 2017
THE WOODLANDS, Texas, May 5, 2017 /PRNewswire/ -- Huntsman Corporation (NYSE: HUN) announced today that Venator Materials ("Venator"), a wholly-owned subsidiary of Huntsman, has publicly filed a registration statement on Form S-1 with the U.S.
Why Huntsman Corporation (HUN) Stock Might be a Great Pick
Zacks.com - May 22, 2017
One stock that might be an intriguing choice for investors right now is Huntsman Corporation (HUN - Free Report) . This is because this security in the Chemical - Diversified space is seeing solid earnings estimate revision activity, and is in great ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for HUN 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 HUN'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.

$24.75 Current Price

$23.29 Growth Price (DCF)

Overvalued by 5.91%


Growth Rate Assumed by Market: 2.01%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$11.61 Book Price

Overvalued by 53.09%


Poor Cash Return on Invested Capital over the past 5 years

HUN has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

HUN has only created $3.96 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 362.00M 237.00M 159.00M -88.00M 667.00M
divided by
Invested Capital 6.32B 6.51B 7.81B 7.65B 7.00B
Cash ROIC 5.73% 3.64% 2.04% -1.15% 9.53%

Excellent Return on Equity over the past 5 years

Over the past 5 years, HUN 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.

HUN has generated $16.87 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 371.00M 149.00M 345.00M 126.00M 357.00M
divided by
Stockholders' Equity 1.77B 1.98B 1.78B 1.44B 1.29B
Return on Equity 20.92% 7.53% 19.40% 8.74% 27.74%

Good Business Performance over the past 10 years

It's likely HUN has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is HUN has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

HUN has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow -716.60M 349.00M 915.00M -294.00M 35.00M 362.00M 237.00M 159.00M -88.00M 667.00M

Weak Balance Sheet

HUN's financial position is not ideal. The key is to check whether HUN 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 154.00M 657.00M 1.75B 966.00M 554.00M 387.00M 520.00M 860.00M 257.00M 414.00M
Current Assets 3.10B 3.24B 4.14B 4.01B 3.95B 4.12B 4.16B 5.04B 3.83B 3.56B
Total Assets 8.17B 8.06B 8.63B 8.71B 8.66B 8.88B 9.19B 11.00B 9.82B 9.19B
Current Liabilities 1.98B 1.61B 1.81B 2.05B 1.83B 2.18B 2.16B 2.33B 1.92B 1.78B
Total Liabilities 6.34B 6.45B 6.78B 6.92B 7.00B 7.11B 7.21B 9.22B 8.38B 7.90B
Stockholder' Equity 1.83B 1.61B 1.84B 1.79B 1.66B 1.77B 1.98B 1.78B 1.44B 1.29B
Current Ratio 1.57 2.02 2.29 1.95 2.16 1.89 1.93 2.16 2.00 2.00
TL-to-TA 0.78 0.80 0.79 0.79 0.81 0.80 0.78 0.84 0.85 0.86

Consistent Reinvestment of Profits over the past 10 years

HUN has consistently retained profits. This may put HUN 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, HUN can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings -1.54B -1.03B -1.02B -1.09B -947.00M -687.00M -687.00M -493.00M -528.00M -325.00M
Retained Earnings Growth - 33.06% 1.55% -7.39% 13.12% 27.46% - 28.24% -7.10% 38.45%

Highly Competitive Industry over the past 10 years

It's likely that HUN is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely HUN invests heavily in R&D and Sales, General & Administrative expenses.

Only $2.06 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income -165.60M 595.00M 106.00M 33.00M 250.00M 371.00M 149.00M 345.00M 126.00M 357.00M
divided by
Revenue 9.65B 10.22B 7.76B 9.25B 11.22B 11.19B 11.08B 11.58B 10.30B 9.66B
Net Profit Margin -1.72% 5.82% 1.37% 0.36% 2.23% 3.32% 1.34% 2.98% 1.22% 3.70%

Inconsistent Gross Profit Margins over the past 10 years

HUN 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.

$24.23 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 1.54B 1.26B 1.07B 1.46B 11.06B 2.03B 1.75B 1.92B 1.85B 1.68B
divided by
Revenue 9.65B 10.22B 7.76B 9.25B 11.22B 11.19B 11.08B 11.58B 10.30B 9.66B
Gross Margin 15.95% 12.37% 13.76% 15.79% 98.52% 18.18% 15.82% 16.57% 17.94% 17.38%

High Capital Intensity over the past 10 years

HUN 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.

260.13% 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 665.10M 418.00M 189.00M 236.00M 330.00M 412.00M 471.00M 601.00M 663.00M 421.00M
divided by
Net Income -165.60M 595.00M 106.00M 33.00M 250.00M 371.00M 149.00M 345.00M 126.00M 357.00M
Capital Expenditure Ratio -401.63% 70.25% 178.30% 715.15% 132.00% 111.05% 316.11% 174.20% 526.19% 117.93%

Very Strong Dividend History over the past 10 years

HUN has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests HUN 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 102.80M 97.00M 96.00M 96.00M 105.00M 96.00M 120.00M 121.00M 135.00M 120.00M
divided by
Shares Outstanding 232.80M 234.26M 238.30M 236.00M 241.70M 240.60M 242.40M 246.00M 245.40M 239.60M
Dividend Paid Per Share 0.44 0.41 0.40 0.41 0.43 0.40 0.50 0.49 0.55 0.50
Price at Year End 21.32 3.01 10.72 15.07 10.00 15.62 24.33 23.32 11.27 19.08
Dividend Yield 2.07% 13.76% 3.76% 2.70% 4.34% 2.55% 2.03% 2.11% 4.88% 2.62%

History of Stock Buybacks over the past 10 years

HUN has some 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 232.80M 234.26M 238.30M 236.00M 241.70M 240.60M 242.40M 246.00M 245.40M 239.60M
Stock Bought Back - -0.62% -1.69% 0.97% -2.36% 0.46% -0.74% -1.46% 0.24% 2.42%
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