Avient Corp (NYSE: AVNT)

Sector: Basic Materials Industry: Specialty Chemicals CIK: 0001122976
Market Cap 3.05 Bn
P/B 4.85
P/E 42.40
P/S 1.07
ROIC (Qtr) 4.37
Div Yield % 1.38
Rev 1y % (Qtr) -1.07
Total Debt (Qtr) 1.97 Bn
Debt/Equity (Qtr) 0.83

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 445.60M provide 891.20x coverage of short-term debt 500000, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 256.40M provides exceptional 160.25x coverage of minority interest expenses 1.60M, showing strong core operations.
  • Operating cash flow of 256.40M provides strong 26.16x coverage of stock compensation 9.80M, indicating sustainable incentive practices.
  • Cash position of 445.60M provides exceptional 278.50x coverage of minority interest expenses 1.60M, indicating strong liquidity.
  • Robust tangible asset base of 2.79B provides 3.86x coverage of working capital 722.30M, indicating strong operational backing.

Bear case

  • Operating cash flow of 256.40M barely covers its investment activities of (105.30M), with a coverage ratio of -2.43, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 256.40M provides thin coverage of dividend payments of (97.60M) with a -2.63 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating earnings of 250.20M show weak coverage of depreciation charges of 184.20M, with a 1.36 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 184.20M relative to operating cash flow of 256.40M, which is 0.72x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 151.10M represents just -1.48x of debt issuance (102M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Geographical Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Specialty Chemicals
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LIN Linde Plc 218.63 Bn 38.41 6.61 25.93 Bn
2 SHW Sherwin Williams Co 110.34 Bn 170.54 11.54 13.58 Bn
3 ECL Ecolab Inc. 80.35 Bn 80.18 5.93 8.67 Bn
4 APD Air Products & Chemicals, Inc. 56.37 Bn 48.29 5.86 18.31 Bn
5 PPG Ppg Industries Inc 34.00 Bn 31.05 2.58 7.91 Bn
6 LYB LyondellBasell Industries N.V. 17.46 Bn 5.03 0.49 13.22 Bn
7 DD DuPont de Nemours, Inc. 16.63 Bn 3.65 0.32 8.90 Bn
8 ALB Albemarle Corp 14.44 Bn 48.94 6.36 3.63 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.58 1.52
EV to Cash from Ops. EV/CFO 32.78 12.52
EV to Debt EV to Debt 1.78 13.65
EV to EBIT EV/EBIT 22.94 21.45
EV to EBITDA EV/EBITDA 19.06 14.82
EV to Free Cash Flow [EV/FCF] EV/FCF 70.80 29.24
EV to Market Cap EV to Market Cap 1.15 3.84
EV to Revenue EV/Rev 1.23 89.11
Price to Book Value [P/B] P/B 4.85 5.48
Price to Earnings [P/E] P/E 42.40 16.02
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.16 -5.31
Dividend Payout Ratio % Div Payout % (Qtr) 87.10 -75.74
Dividend per Basic Share Div per Share (Qtr) 1.08 1.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 65.45 23.50
Interest Coverage Int. cover (Qtr) 2.47 -8.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 7.79 -1.67
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -11.88 72.99
Dividend Growth (1y) % Div 1y % (Qtr) 4.85 -3.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -19.92 -31.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -6.81 51.49
EBIT Growth (1y) % EBIT 1y % (Qtr) -13.43 0.57
EBT Growth (1y) % EBT 1y % (Qtr) -18.23 -80.35
EPS Growth (1y) % EPS 1y % (Qtr) -24.39 -90.82
FCF Growth (1y) % FCF 1y % (Qtr) -13.41 -50.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.92 219.02
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.54 0.70
Cash Payout Ratio Cash Payout (Qtr) 0.27 0.41
Cash Ratio Cash Ratio (Qtr) 0.64 1.28
Current Ratio Curr Ratio (Qtr) 2.03 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 0.83 0.92
Interest Cover Ratio Int Coverage (Qtr) 2.47 -8.92
Times Interest Earned Times Interest Earned (Qtr) 2.47 -8.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 13.40 -333.97
EBIT Margin % EBIT Margin % (Qtr) 7.71 -374.34
EBT Margin % EBT Margin % (Qtr) 4.59 -379.75
Gross Margin % Gross Margin % (Qtr) 32.20 29.26
Net Profit Margin % Net Margin % (Qtr) 3.50 -380.67