Koppers Holdings Inc. (NYSE: KOP)

Sector: Basic Materials Industry: Specialty Chemicals CIK: 0001315257
Market Cap 591.38 Mn
P/B 29.13
P/E -9.13
P/S 0.40
ROIC (Qtr) 3.83
Div Yield % 0.28
Rev 1y % (Qtr) -12.45
Total Debt (Qtr) 1.03 Bn
Debt/Equity (Qtr) 1.88

About

Koppers Holdings Inc., a reputable company listed on the New York Stock Exchange under the symbol KOP, is a leading integrated global provider of treated wood products, wood preservation chemicals, and carbon compounds. The company operates in various industries, including railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber, and construction. Koppers Holdings Inc.'s main business activities encompass the manufacturing and distribution of treated wood products, wood preservation chemicals, and carbon compounds....

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Price action

Investment thesis

Bull case

  • Robust free cash flow of 95.10M exceeds capital expenditure of 57M by 1.67x, indicating strong organic growth funding capability.
  • Operating cash flow of 152.10M fully covers other non-current liabilities 93.10M by 1.63x, showing strong long-term stability.
  • Tangible assets of 1.47B provide robust 20.62x coverage of other current liabilities 71.30M, indicating strong asset backing.
  • Retained earnings of 511.40M provide strong 7.17x coverage of other current liabilities 71.30M, indicating earnings quality.
  • Operating cash flow of 152.10M provides strong 4.13x coverage of tax liabilities 36.80M, showing excellent fiscal position.

Bear case

  • Operating cash flow of 152.10M barely covers its investment activities of (57.40M), with a coverage ratio of -2.65, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 37.90M against inventory of 400.30M, the 0.09 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 152.10M provides thin coverage of dividend payments of (6M) with a -25.35 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating earnings of 96.70M show weak coverage of depreciation charges of 86.90M, with a 1.11 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 95.10M represents just -1.55x of debt issuance (61.30M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments 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 0.68 1.52
EV to Cash from Ops. EV/CFO 11.17 12.52
EV to Debt EV to Debt 1.25 13.65
EV to EBIT EV/EBIT -71.43 21.45
EV to EBITDA EV/EBITDA 42.02 14.82
EV to Free Cash Flow [EV/FCF] EV/FCF 18.74 29.24
EV to Market Cap EV to Market Cap 2.17 3.84
EV to Revenue EV/Rev 0.88 89.11
Price to Book Value [P/B] P/B 29.13 5.48
Price to Earnings [P/E] P/E -9.13 16.02
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.68 -5.31
Dividend Payout Ratio % Div Payout % (Qtr) 34.80 -75.74
Dividend per Basic Share Div per Share (Qtr) 0.31 1.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 6.41 23.50
Interest Coverage Int. cover (Qtr) 1.40 -8.92
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 35.23 -1.67
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -14.83 72.99
Dividend Growth (1y) % Div 1y % (Qtr) 14.81 -3.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -56.47 -31.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -27.41 51.49
EBIT Growth (1y) % EBIT 1y % (Qtr) -47.16 0.57
EBT Growth (1y) % EBT 1y % (Qtr) -74.12 -80.35
EPS Growth (1y) % EPS 1y % (Qtr) -75.55 -90.82
FCF Growth (1y) % FCF 1y % (Qtr) 308.15 -50.40
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.42 219.02
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.02 0.70
Cash Payout Ratio Cash Payout (Qtr) 0.03 0.41
Cash Ratio Cash Ratio (Qtr) 0.15 1.28
Current Ratio Curr Ratio (Qtr) 2.63 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 1.88 0.92
Interest Cover Ratio Int Coverage (Qtr) 1.40 -8.92
Times Interest Earned Times Interest Earned (Qtr) 1.40 -8.92
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 9.50 -333.97
EBIT Margin % EBIT Margin % (Qtr) 5.03 -374.34
EBT Margin % EBT Margin % (Qtr) 1.45 -379.75
Gross Margin % Gross Margin % (Qtr) 21.90 29.26
Net Profit Margin % Net Margin % (Qtr) 0.80 -380.67