Monday, October 24, 2011

High Yields from Chemicals

A few of the major chemical companies are reporting earnings this week, including EI DuPont de Nemours & Co. (DD), Dow Chemical Company (DOW), and Eastman Chemical Company (EMN), with the anticipation of reports of higher revenues and earnings for the latest quarter in most cases.

Let's look at Dow Chemical as an example. It is the second largest chemical manufacturer in the world based on revenues and the third-largest chemical company in the world by market capitalization. The company reports its earnings on Thursday, October 27, and analysts are expecting a 13.7% increase in revenues. The stock pays a generous 3.7% yield and trades at nine times forward earnings. The research firm Ticonderoga just initiated coverage a couple weeks ago giving it a Buy rating.

Air Products & Chemicals Inc. (APD) markets gases and chemicals for industrial use, and pays a decent yield of 2.8%. The company just reported strong earnings last week, reporting a 19.4% increase in earnings on an 11.1% revenue rise. The stock has a forward price to earnings ratio of 13.

FMC Corp. (FMC) provides agricultural, consumer, and industrial chemicals. The stock pays a small yield of 0.8% and trades at a forward PE of 12. The company reports earnings on Halloween.

To see a free list of all the chemical companies including their yields, go to

Full Disclosure: Author did not own any of the above at the time the article was written.


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