LSE:ELM

Stock Analysis Report

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Executive Summary

Elementis plc operates as a specialty chemical company in North America, Europe, and internationally.


Snowflake Analysis

Very undervalued with mediocre balance sheet.


Similar Companies

Share Price & News

How has Elementis's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ELM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

5.2%

ELM

-0.03%

GB Chemicals

0.1%

GB Market


1 Year Return

-50.5%

ELM

-18.7%

GB Chemicals

-15.3%

GB Market

Return vs Industry: ELM underperformed the UK Chemicals industry which returned -18.7% over the past year.

Return vs Market: ELM underperformed the UK Market which returned -15.3% over the past year.


Shareholder returns

ELMIndustryMarket
7 Day5.2%-0.03%0.1%
30 Day-17.1%-4.8%-4.6%
90 Day34.5%17.9%13.1%
1 Year-49.8%-50.5%-16.7%-18.7%-11.4%-15.3%
3 Year-73.5%-77.4%-13.1%-20.4%-3.4%-15.2%
5 Year-66.3%-74.0%-3.4%-18.0%15.4%-10.3%

Price Volatility Vs. Market

How volatile is Elementis's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Elementis undervalued compared to its fair value and its price relative to the market?

34.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ELM (£0.67) is trading below our estimate of fair value (£1.03)

Significantly Below Fair Value: ELM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ELM is good value based on its PE Ratio (10.5x) compared to the Chemicals industry average (21.1x).

PE vs Market: ELM is good value based on its PE Ratio (10.5x) compared to the UK market (15x).


Price to Earnings Growth Ratio

PEG Ratio: ELM is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: ELM is good value based on its PB Ratio (0.5x) compared to the GB Chemicals industry average (1.8x).


Next Steps

Future Growth

How is Elementis forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

11.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ELM's forecast earnings growth (11.8% per year) is above the savings rate (1.2%).

Earnings vs Market: ELM's earnings (11.8% per year) are forecast to grow slower than the UK market (21.4% per year).

High Growth Earnings: ELM's earnings are forecast to grow, but not significantly.

Revenue vs Market: ELM's revenue is expected to decline over the next 3 years (-0.7% per year).

High Growth Revenue: ELM's revenue is forecast to decline over the next 3 years (-0.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ELM's Return on Equity is forecast to be low in 3 years time (7.4%).


Next Steps

Past Performance

How has Elementis performed over the past 5 years?

-21.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ELM has high quality earnings.

Growing Profit Margin: ELM's current net profit margins (5.3%) are lower than last year (6.1%).


Past Earnings Growth Analysis

Earnings Trend: ELM's earnings have declined by -21.2% per year over the past 5 years.

Accelerating Growth: ELM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ELM had negative earnings growth (-6.8%) over the past year, making it difficult to compare to the Chemicals industry average (-6.5%).


Return on Equity

High ROE: ELM's Return on Equity (5.1%) is considered low.


Next Steps

Financial Health

How is Elementis's financial position?


Financial Position Analysis

Short Term Liabilities: ELM's short term assets ($393.1M) exceed its short term liabilities ($175.5M).

Long Term Liabilities: ELM's short term assets ($393.1M) do not cover its long term liabilities ($823.5M).


Debt to Equity History and Analysis

Debt Level: ELM's debt to equity ratio (61%) is considered high.

Reducing Debt: ELM's debt to equity ratio has increased from 1.6% to 61% over the past 5 years.

Debt Coverage: ELM's debt is well covered by operating cash flow (25.9%).

Interest Coverage: ELM's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet


Next Steps

Dividend

What is Elementis's current dividend yield, its reliability and sustainability?

4.71%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ELM's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ELM's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ELM's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ELM's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: ELM is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ELM's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.7yrs

Average management tenure


CEO

Paul Waterman (56yo)

4.42yrs

Tenure

US$1,114,000

Compensation

Mr. Paul Waterman has been the Group Chief Executive Officer and Executive Director of Elementis plc since February 8, 2016. Mr. Waterman served as Global Chief Executive Officer of Lubricants at BP p.l.c. ...


CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD1.39M) is above average for companies of similar size in the UK market ($USD920.08K).

Compensation vs Earnings: Paul's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Paul Waterman
Group CEO & Executive Director4.42yrsUS$1.11m0.12% $455.6k
Ralph Hewins
Group CFO & Executive Director3.83yrsUS$543.00k0.010% $37.5k
Steve Ridge
Senior Vice President of Manufacturing & Supply Chain1.33yrsUS$118.00kno data
Joseph Lupia
Senior Vice President of Global Technologyno datano datano data
James Curran
Director of Investor Relationsno datano datano data
Walker Allen
General Counsel & Chief Compliance Officer21.5yrsno datano data
Chris Shepherd
Chief Human Resources Officer2.67yrsno datano data
Mark Su
Managing Director of China Regionno datano datano data
Marci Brand
Senior Vice President of Global Personal Careno datano datano data
Luc Van Ravenstein
Senior Vice President of Global Coatings & Energyno datano datano data

3.7yrs

Average Tenure

56yo

Average Age

Experienced Management: ELM's management team is considered experienced (3.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paul Waterman
Group CEO & Executive Director4.42yrsUS$1.11m0.12% $455.6k
Ralph Hewins
Group CFO & Executive Director3.83yrsUS$543.00k0.010% $37.5k
Andrew Duff
Non-Executive Chairman6.25yrsUS$382.00k0.020% $71.9k
John O'Higgins
Senior Independent Director0.25yrno datano data
Anne Hyland
Independent Non-Executive Director7.08yrsUS$118.00k0.0038% $14.0k
Steve Good
Independent Non-Executive Director5.75yrsUS$57.00k0.011% $39.6k
Dorothée Deuring
Independent Non-Executive Director3.33yrsUS$100.00k0.0028% $10.3k

4.4yrs

Average Tenure

56yo

Average Age

Experienced Board: ELM's board of directors are considered experienced (4.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Elementis plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Elementis plc
  • Ticker: ELM
  • Exchange: LSE
  • Founded: 1844
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: UK£367.153m
  • Shares outstanding: 580.02m
  • Website: https://www.elementis.com

Number of Employees


Location

  • Elementis plc
  • Caroline House
  • 55 - 57 High Holborn
  • London
  • Greater London
  • WC1V 6DX
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EMNS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
ELMLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
E3EDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
ELMLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
ELMT.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDJul 2013

Biography

Elementis plc operates as a specialty chemical company in North America, Europe, and internationally. It operates through five segments: Personal Care, Coatings, Talc, Chromium, and Energy. The Personal Care segment produces rheological modifiers and compounded products for antiperspirants/deodorants, bath and soap, color cosmetics, and hair and skin care products. The Coatings segment produces rheological modifiers and additives for industrial finishes, architectural coatings, construction, adhesives and sealants, inks, colorant dispersions, and specialty applications. The Talc segment produces and supplies talc for use in plastics, paints and coatings, food and pharmaceuticals, ceramics, polyester putties, paper, and pulp sectors. The Chromium segment produces chromium chemicals, such as chromic oxide, chromic acid, chrome sulfate, sodium dichromate, and sodium sulfate for use in pigments, cosmetics, refractories, chrome metal production, metal and plastic finishing, wood treatment, leather tanning, trivalent metal finishing, coatings, and metal passivation, as well as for making detergents, glasses, papers, and starches. The Energy segment produces rheological modifiers and additives for oil and gas drilling, lubrication, and stimulation activities. It also offers personal care products, waxes, additives and resins, organoclays, colourants, and other specialty additives. Elementis plc was founded in 1844 and is headquartered in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/06 20:50
End of Day Share Price2020/07/06 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.