Celanese Corp (NYSE: CE)

Sector: Basic Materials Industry: Chemicals CIK: 0001306830
Market Cap 6.07 Bn
P/B 0.86
P/E 3.05
P/S 0.57
ROIC (Qtr) -12.97
Div Yield % 5.08
Rev 1y % (Qtr) -8.65
Total Debt (Qtr) 13.13 Bn
Debt/Equity (Qtr) 3.32
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About

Celanese Corporation (CE), a prominent player in the chemicals industry, is a global chemical and specialty materials company that leads in the production of high-performance engineered polymers and acetyl products. The company's main business activities include the production and sale of a wide range of products, such as engineered materials, acetyl products, solvents, and derivatives. Celanese generates revenue through the sale of its primary products, including nylon compounds, polyoxymethylene (POM), polyethylene terephthalate (PET), polybutylene...

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Investment thesis

Bull case

  • Operating cash flow of 1.39B provides exceptional 99.14x coverage of minority interest expenses 14M, showing strong core operations.
  • Operating cash flow of 1.39B provides strong 49.57x coverage of stock compensation 28M, indicating sustainable incentive practices.
  • Robust free cash flow of 1.02B exceeds capital expenditure of 364M by 2.81x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 14.79B provides 6.26x coverage of working capital 2.36B, indicating strong operational backing.
  • Tangible assets of 14.79B provide robust 11.55x coverage of other current liabilities 1.28B, indicating strong asset backing.

Bear case

  • Operating cash flow of 1.39B barely covers its investment activities of (373M), with a coverage ratio of -3.72, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.39B provides thin coverage of dividend payments of (86M) with a -16.14 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (373M) provide weak support for R&D spending of 124M, which is -3.01x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of (2.09B) show weak coverage of depreciation charges of 774M, with a -2.70 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 1.02B represents just -5.60x of debt issuance (183M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Investment, Name Breakdown of Revenue (2021)

Peer comparison

Companies in the Chemicals
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 DOW Dow Inc. 22.27 Bn -8.49 0.56 19.60 Bn
2 CE Celanese Corp 6.07 Bn 3.05 0.57 13.13 Bn
3 MEOH Methanex Corp 4.41 Bn 45.97 2.24 3.64 Bn
4 OLN OLIN Corp 3.95 Bn 50.79 0.65 3.30 Bn
5 HUN Huntsman CORP 2.92 Bn 8.95 0.39 2.40 Bn
6 REX REX AMERICAN RESOURCES Corp 1.12 Bn 22.21 1.72 0.02 Bn
7 TROX Tronox Holdings plc 1.06 Bn -9.74 0.40 3.46 Bn
8 GPRE Green Plains Inc. 0.89 Bn -7.32 0.42 0.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.82 0.76
EV to Cash from Ops. EV/CFO 8.72 10.63
EV to Debt EV to Debt 1.39 4.16
EV to EBIT EV/EBIT 9.54 -392.22
EV to EBITDA EV/EBITDA 7.62 11.31
EV to Free Cash Flow [EV/FCF] EV/FCF 11.75 18.26
EV to Market Cap EV to Market Cap 3.01 1.76
EV to Revenue EV/Rev 1.71 4.23
Price to Book Value [P/B] P/B 0.86 1.69
Price to Earnings [P/E] P/E 3.05 -53.47
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -35.97 -12.67
Dividend Payout Ratio % Div Payout % (Qtr) -2.80 17.68
Dividend per Basic Share Div per Share (Qtr) 0.09 0.50
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.96 1,007.72
Interest Coverage Int. cover (Qtr) -3.04 -82.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 20.52 22.09
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 77.12 4.03
Dividend Growth (1y) % Div 1y % (Qtr) -96.79 -8.48
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -202.63 -121.97
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -187.34 -25.84
EBIT Growth (1y) % EBIT 1y % (Qtr) -257.96 -147.36
EBT Growth (1y) % EBT 1y % (Qtr) -537.95 -143.26
EPS Growth (1y) % EPS 1y % (Qtr) -383.65 -108.77
FCF Growth (1y) % FCF 1y % (Qtr) 21.33 -91.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -14.67 0.31
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.44 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.05 0.07
Cash Ratio Cash Ratio (Qtr) 0.39 1.02
Current Ratio Curr Ratio (Qtr) 1.63 2.84
Debt to Equity Ratio Debt/Equity (Qtr) 3.32 1.19
Interest Cover Ratio Int Coverage (Qtr) -3.04 -82.93
Times Interest Earned Times Interest Earned (Qtr) -3.04 -82.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -13.60 -96.08
EBIT Margin % EBIT Margin % (Qtr) -21.56 -110.82
EBT Margin % EBT Margin % (Qtr) -28.64 -114.07
Gross Margin % Gross Margin % (Qtr) 21.30 10.84
Net Profit Margin % Net Margin % (Qtr) -31.90 -117.97