Orion Engineered Carbons Is In The Black

That basic sector includes thirteen industries all related to mining, making and delivering essential commodities. The industries are: agricultural inputs; aluminum; building materials; chemicals; coal; copper; industrial metals and minerals; paper; silver; specialty chemicals; steel.

Today I'm reviewing a small-cap specialty chemicals company.

The company's name is Orion Engineered Carbons, S.A. It's trading ticker symbol is OEC.  

Orion Engineered Carbons SA is a producer of carbon black. The company's segment consists of Specialty Carbon Black and Rubber Carbon Black.

The company offers post-treated specialty carbon black grades for coatings and printing applications; and various conductive carbon black grades for use in polymer and printing applications, as well as in silicon, non-woven textile, building material, battery electrodes metallurgical, agrochemical, and carbon brush applications. 

It also provides rubber carbon black products for applications in mechanical rubber goods under the PUREX brand, as well as in tires under the ECORAX brand name

Orion Engineered Carbons S.A. was incorporated in 2011 and is headquartered in Senningerberg, Luxembourg. Orion Engineered Carbons S.A. is a subsidiary of Kinove Luxembourg Holdings 1 S.a r.l.

I use three key data points gauge the value of any dividend equity or fund like Orion Engineered Carbons, S.A.: 

(1) Price

(2) Dividends

(3) Returns

After those three, four more keys will finally unlock an equity or fund in which to invest. 

No matter what, it's the first three primary traits that best tell whether a company has made, is making, and will make money. 

OEC Price

Orion's price was $29.80 per share at Friday's market close. A year ago its price was $17.80 for a gain of $12 per share in the past year.  

Assuming Orion's price will continue to trade in the range of $20.00 to $45.00 next year, its price could grow another $12 from $29.80 to $41.80 by June 4, 2019. 

OEC Dividends

Orion's most recently declared quarterly dividend was $0.20 per share to be paid in June. That $0.20 quarterly dividend equates to an estimated annual payout of $0.80 for 2018 which yields 2.7% at Friday's $29.80 closing stock price.  

Gains For OEC?

The $12 estimated year over year price gain plus an anticipated dividend of  $0.80 makes a projected gross annual gain of $12.80 per share, which will be reduced by the costs to trade those shares.  

$1,000.00 invested today at the $29.80 price buys 34 shares. 

A $10 broker fee paid half at purchase and half at sale subtracts $0.29 per share.

Taking that $0.29 brokerage cost out of the estimated $12.80 gross gain per share leaves a net gain of $12.51 X 34 shares 

= $425.34

or a 42.5% potential net gain on a $1,013.20 investment.

Therefore, Orion Engineered Carbons, S.A., now shows a possible 42.5% net gain including a 2.7% dividend yield. 

Seven analysts cover this stock:

Three say "buy."

One says Orion will "outperform."

Three say "hold" the stock.

The median analyst recommendation is 2.0 or "Outperform" and their median price target is  $10 below the estimated year over year number I just calculated.

Y Charts rates OEC "neutral" for an overall "Y" rating. Y Charts also shows "Average" for a Value score of 7 out of ten points. And YCharts ranks OEC "strong" with 7 out of 10  possible Fundamental points. Y Charts Historic Valuation score is 28.26% overvalued, based on a $23.22 historic value multiple.

You could look at all those numbers like this: Orion Engineered Carbons, S.A. has made money, is making money, and could net an 12.7% to 42.5 % net gain next year including a 2.7% dividend yield. It could be more, it could be less.

The above speculation is conjecture based on past year performance. Actual results remain to be seen.  They could turn out to be far higher or lower. More study is required for you to determine if Orion Engineered Carbons, S.A. is worth your time and money.

Disclaimer: For more information and to get a two-week free sample of my stock portfolios just click on this link. Click ...

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