Shares of Celanese (CE) reached a new 52-week high of $66.35 on Jul 7, eclipsing its previous high of $66.33. The stock pulled back to end the trading session at $65.80 on that day.
The chemical major, which has a market cap of around $10.3 billion, has seen its shares jump roughly 20% so far this year and 46% over a year, outperforming the gains in the S&P 500 for both periods. Average volume of shares traded over the last three months is around 982.9K. The company’s long-term projected EPS growth is 8.7%.
What’s Driving Celanese Up?
Celanese, a Zacks Rank #2 (Buy) stock, posted better-than-expected first-quarter 2014 results on Apr 21. Both revenues and adjusted earnings for the quarter topped the Zacks Consensus Estimate. The company has delivered positive earnings surprises in three of the trailing four quarters with an average surprise of 3.45%.
Celanese expects earnings to rise 12% to 14% in 2014, driven by company-specific initiatives including innovation of new products and enhancement of efficiencies through productivity.
Celanese’s strong presence in emerging markets will enable it to deliver incremental earnings this year. The company has taken up cost-cutting measures and the necessary steps to run its plants better and counter weak demand.
Celanese is also aggressively expanding its capacity in the emerging Asian markets. Its expansion initiatives in China are expected to support earnings growth. Celanese’s integrated chemical complex in Nanjing, China serves as a base for expansion in Asia, supporting the region's increasing demand.
Moreover, Celanese continues to generate strong cash flows and remains focused on returning value to its shareholders. The company, in Apr 2014, raised its quarterly dividend by 39% to 25 cents per share.
Other Stocks to Consider
Other companies in the chemical space worth considering include KMG Chemicals Inc. (KMG), Ashland Inc. (ASH) and LyondellBasell Industries NV (LYB). While KMG Chemicals sports a Zacks Rank #1 (Strong Buy), both Ashland and LyondellBasell hold a Zacks Rank #2 (Buy).
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