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Celanese Jacks Up Dividend

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Chemicals and advanced materials maker Celanese Corp’s (CE) Board has approved a 20% raise in its quarterly dividend to 9 cents per share from 7.5 cents. Annualized, this represents a payout of 36 cents per share.

The revised dividend is payable for the period starting Feb 1, 2013, and ending on Apr 30, 2013, to shareholders of record as of May 6, 2013. This represents Celanese’s 4th straight year of dividend increase, averaging a 23% rise over the period.


Celanese is among the world’s largest producers of acetyl products as well as the leading global producer of high-performance engineered polymers. The company’s strong presence in emerging markets will enable it to deliver incremental earnings in 2013.


Celanese’s first quarter results, reported on Apr 18, were a mixed bag with adjusted earnings topping expectations while sales missing the same. The company expects the challenging economic conditions to persist throughout 2013. For 2013, Celanese expects earnings growth on the back of company-specific initiatives and to be consistent with its long-term growth objective of 12% to 14%. 


Celanese recently said that it is changing its accounting policy for pension plans and other post-retirement benefit plans. Per the new policy dubbed mark-to-market (:MTM) accounting, it will recognize actuarial gains and losses and changes in the fair value of the plans' assets in the fourth quarter every year. As such, Celanese will no longer defer and amortize actuarial gains and losses into future years.


Celanese is aggressively expanding capacity in the emerging Asian markets. Its expansion initiatives in China are expected to support earnings growth.


However, Celanese is witnessing weak demand and pricing in its core acetyl business. The challenging economic conditions in Europe and sluggish growth in Asia may impact the company’s results.


Celanese currently carries a short-term (1 to 3 months) Zacks Rank #2 (Buy).


Other companies in the chemical industry that are worth considering include Shin-Etsu Chemical Co.  Ltd. ( SHECY), Eastman Chemical ( EMN) and FMC Corp. ( FMC). While Shin-Etsu Chemical retains a Zacks Rank #1 (Strong Buy), both Eastman Chemical and FMC hold a Zacks Rank #2 (Buy).

Read the Full Research Report on CE

Read the Full Research Report on SHECY

Read the Full Research Report on EMN

Read the Full Research Report on FMC

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