Why You Should Add Ingevity (NGVT) Stock to Your Portfolio
Ingevity Corporation’s NGVT stock looks promising at the moment. It is benefiting from higher demand and prices in its industrial specialties and engineered polymers businesses and its actions to drive capacity.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it is poised to carry the momentum ahead.
Let's see what makes this Zacks Rank #2 (Buy) stock an attractive investment option at the moment.
Estimates Going Up
Over the past two months, the Zacks Consensus Estimate for Ingevity for the current year has increased around 1.7%. The consensus estimate for 2023 has also been revised around 2.9% upward over the same time frame.
Positive Earnings Surprise History
Ingevity has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 16.3%, on average.
Healthy Growth Prospects
The Zacks Consensus Estimate for earnings for 2022 for Ingevity is currently pegged at $6.05, reflecting an expected year-over-year growth of 15.7%. Moreover, earnings are expected to register a 15.7% growth in 2023.
Superior Return on Equity (ROE)
ROE is a measure of a company’s efficiency in utilizing shareholder’s funds. ROE for the trailing 12-months for Ingevity is 34%, above the industry’s level of 27.4%.
Upbeat Prospects
Ingevity is benefiting from a recovery in demand for its products from the pandemic-induced slowdown, which is leading to higher volumes and prices. The company’s Performance Chemicals segment is riding on solid demand as well as higher selling prices in engineered polymers and industrial specialties. The company is also benefiting from increased demand for process purification products in the Performance Materials unit. Strong demand is expected to continue to support its top line and margins moving ahead.
Ingevity is also taking a number of actions to drive long-term growth. It remains committed to invest organically. The company also remains focused on optimizing its operations and inventory to provide outstanding service to customers. It is also taking price hike actions to mitigate cost inflation. Ingevity is also committed to capturing the maximum value for its products.
The acquisition of Ozark Materials will also strengthen the company’s position in the paving construction industry and enable it to better serve its customers. Ozark Materials is a leading manufacturer of pavement marking materials, including thermoplastic pavement markings, waterborne traffic paints and preformed thermoplastics. Ingevity expects the entity to generate revenues of around $150 million and EBITDA margins of roughly 20% in calendar 2023.
The company’s $60 million investment to buy an equity stake in Nexeon Limited also establishes its presence in the electric vehicle (EV) market along with providing opportunities to expand its activated carbon business. The company’s investment includes a commitment to jointly develop technology for EVs using Ingevity’s activated carbon to improve the performance of lithium-ion batteries.
Ingevity Corporation Price and Consensus
Ingevity Corporation price-consensus-chart | Ingevity Corporation Quote
Stocks to Consider
Other top-ranked stocks worth considering in the basic materials space include Daqo New Energy Corp. DQ, Sociedad Quimica y Minera de Chile S.A. SQM and The Chemours Company CC.
Daqo New Energy, currently carrying a Zacks Rank #1 (Strong Buy), has an expected earnings growth rate of 177.5% for the current year. The Zacks Consensus Estimate for DQ's earnings for the current fiscal has been revised 20.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Daqo New Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.8%. DQ has gained around 24% over a year.
Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 32.6% upward in the past 60 days.
Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has rallied roughly 85% in a year. The company carries a Zacks Rank #2.
Chemours has a projected earnings growth rate of 40% for the current year. The Zacks Consensus Estimate for CC's current-year earnings has been revised 7.3% upward in the past 60 days.
Chemours’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 28.3%, on average. CC has gained around 19% in a year and currently carries a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Sociedad Quimica y Minera S.A. (SQM) : Free Stock Analysis Report
DAQO New Energy Corp. (DQ) : Free Stock Analysis Report
The Chemours Company (CC) : Free Stock Analysis Report
Ingevity Corporation (NGVT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
