Balchem Corp (NASDAQ: BCPC)

Sector: Basic Materials Industry: Specialty Chemicals CIK: 0000009326
Market Cap 4.29 Bn
P/B 32.32
P/E 189.54
P/S 19.67
ROIC (Qtr) 10.75
Div Yield % 0.65
Rev 1y % (Qtr) 11.51
Total Debt (Qtr) 172.00 Mn
Debt/Equity (Qtr) 0.13

About

Balchem Corporation (BCPC) operates in the diverse industries of nutritional, food, pharmaceutical, animal health, medical device sterilization, plant nutrition, and industrials markets. The company's primary business activities involve the development, manufacturing, and marketing of specialty performance ingredients and products. Balchem's operations span across three reportable segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products, with a global presence that caters to a wide range of customers. The Human...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 201.60M provides robust 1.17x coverage of total debt 172M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 65.09M provide 15.70x coverage of short-term debt 4.14M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 201.60M provides exceptional 18.10x coverage of interest expenses 11.14M, showing strong debt service capability.
  • Operating cash flow of 201.60M provides strong 11.09x coverage of stock compensation 18.19M, indicating sustainable incentive practices.
  • Strong tangible asset base of 677.08M provides 3.94x coverage of total debt 172M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 201.60M barely covers its investment activities of (64.43M), with a coverage ratio of -3.13, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 201.60M provides thin coverage of dividend payments of (28.28M) with a -7.13 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (64.43M) provide weak support for R&D spending of 17.97M, which is -3.59x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 65.09M provide limited coverage of acquisition spending of (24.79M), which is -2.63x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 201.60M barely covers operating expenses of (72000) with a -2799.97 ratio, suggesting thin operational efficiency margins and limited flexibility.

Segments Breakdown of Revenue (2024)

Product and Service 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 2.58 1.52
EV to Cash from Ops. EV/CFO 103.87 12.52
EV to Debt EV to Debt 24.91 13.65
EV to EBIT EV/EBIT 125.21 21.45
EV to EBITDA EV/EBITDA 101.31 14.82
EV to Free Cash Flow [EV/FCF] EV/FCF 113.97 29.24
EV to Market Cap EV to Market Cap 1.00 3.84
EV to Revenue EV/Rev 19.63 89.11
Price to Book Value [P/B] P/B 32.32 5.48
Price to Earnings [P/E] P/E 189.54 16.02
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 5.28 -5.31
Dividend Payout Ratio % Div Payout % (Qtr) 18.90 -75.74
Dividend per Basic Share Div per Share (Qtr) 0.87 1.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 17.43 23.50
Interest Coverage Int. cover (Qtr) 18.37 -8.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -15.32 -1.67
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -11.67 72.99
Dividend Growth (1y) % Div 1y % (Qtr) 10.13 -3.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 15.67 -31.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 10.55 51.49
EBIT Growth (1y) % EBIT 1y % (Qtr) 17.44 0.57
EBT Growth (1y) % EBT 1y % (Qtr) 24.64 -80.35
EPS Growth (1y) % EPS 1y % (Qtr) 22.02 -90.82
FCF Growth (1y) % FCF 1y % (Qtr) -0.47 -50.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.76 219.02
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.61 0.70
Cash Payout Ratio Cash Payout (Qtr) 0.12 0.41
Cash Ratio Cash Ratio (Qtr) 0.52 1.28
Current Ratio Curr Ratio (Qtr) 2.72 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 0.13 0.92
Interest Cover Ratio Int Coverage (Qtr) 18.37 -8.92
Times Interest Earned Times Interest Earned (Qtr) 18.37 -8.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 24.60 -333.97
EBIT Margin % EBIT Margin % (Qtr) 20.19 -374.34
EBT Margin % EBT Margin % (Qtr) 19.09 -379.75
Gross Margin % Gross Margin % (Qtr) 35.80 29.26
Net Profit Margin % Net Margin % (Qtr) 14.70 -380.67