Chemicals & Allied Products
Ingevity Corporation manufactures and sells specialty chemicals and activated carbon materials in North America, the Asia Pacific, Europe, the Middle East, Africa, and South America. It operates through two segments, Performance Materials and Performance Chemicals. The Performance Materials segment engineers, manufactures, and sells hardwood-based and chemically activated carbon products primarily for use in gasoline vapor emission control systems in cars, motorcycles, trucks, and boats. This segment also produces other activated carbon products for use in various applications, including food, water, beverage, and chemical purification. The Performance Chemicals segment comprises of pavement technologies, industrial specialties, and engineered polymers. It manufactures products derived from crude tall oil and lignin extracted from the kraft pulping process, as well as caprolactone monomers and derivatives derived from cyclohexanone and hydrogen peroxide. This segment's products are used in various applications comprising warm mix paving, pavement preservation, pavement reconstruction and recycling, road striping, oil well service additives, oil production, and downstream applications; and adhesives, agrochemical dispersants, lubricants, printing inks, industrial intermediates and oilfield, coatings, resins, elastomers, bioplastics, and medical devices. The company was founded in 1964 and is headquartered in North Charleston, South Carolina.
Discounted Cash Flow Valuation of Ingevity Corp
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $86.8M | $98.06M | $109.9M | $122.2M | $134.8M | $147.5M | $160.1M | $172.4M | $184.1M | $194.9M | $204.6M | $2.046B |
DCF | $85.27M | $83.11M | $80.36M | $77.08M | $73.35M | $69.23M | $64.81M | $60.17M | $55.4M | $50.58M | $505.8M | |
Value | $1.205B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 8.3% | 3.9% | 13% | 15% | 14% | 15% | 8.5% | 13% | -0.32% | -6.8% |
ROA | 21% | 20% | 22% | 20% | 19% | 17% | 17% | 17% | 15% | 14% |
ROE | 15% | 26% | 46% | 50% | 35% | 28% | 18% | 30% | -0.86% | -20% |
The average Net Margin over the past 5 years is +10.82%.
The trend of Net Margin over the past 5 years is -2.49%.
The average ROA over the past 5 years is +17.4%.
The trend of ROA over the past 5 years is -0.87%.
The average ROE over the past 5 years is +26.63%.
The trend of ROE over the past 5 years is -7.93%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | -3.12 | 7.01 | 3.82 | 4.87 | 7.96 | 4.93 | 6.87 | 8.68 | 16.34 | 18.24 |
Debt Equity | 0.17 | 3.71 | 1.67 | 2.27 | 2.41 | 2.08 | 1.93 | 2.12 | 2.47 | 2.79 |
MIN | ||||||||||
Graham Stability | - | - | 100% | 100% | 100% | 100% | 66% | 100% | -3.2% | -3.2% |
The Debt/FCF trailing twelve month is 18.24.
The trend of Debt/FCF over the past 5 years is 1.76.
Graham’s Stability measure stands at -0.03.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
---|---|---|---|---|---|
Revenue | 9.3% | 8.3% | 12% | 1.4% | 1.7% |
Net Income | - | - | - | - | 1.4% |
Stockholders Equity | 25% | 13% | -0.56% | -9.6% | -1.8% |
FCF | 4.3% | -9.6% | -29% | -44% | -16% |
The Revenue CAGR over the past 5 years is +8.34%.
The trend of Revenue growth rate over the past 5 years is +1.72%.
The Earnings CAGR over the past 5 years is -.
The trend of Earnings growth rate over the past 5 years is +1.42%.
The Equity CAGR over the past 5 years is +13.27%.
The trend of Equity growth rate over the past 5 years is -1.83%.
The FCF CAGR over the past 5 years is -9.63%.
The trend of FCF growth rate over the past 5 years is -16.3%.