NasdaqGS:IOSP

Stock Analysis Report

Executive Summary

Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals worldwide.

Rewards

Trading at 21.2% below its fair value

Earnings are forecast to grow 6.57% per year

Earnings grew by 32% over the past year

Risk Analysis

No risks detected for IOSP from our risk checks.


Snowflake Analysis

Flawless balance sheet with proven track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: IOSP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-12.1%

IOSP

-3.6%

US Chemicals

-4.2%

US Market


1 Year Return

12.0%

IOSP

-9.8%

US Chemicals

14.0%

US Market

Return vs Industry: IOSP exceeded the US Chemicals industry which returned -9.8% over the past year.

Return vs Market: IOSP underperformed the US Market which returned 14% over the past year.


Shareholder returns

IOSPIndustryMarket
7 Day-12.1%-3.6%-4.2%
30 Day-14.5%-2.7%-1.8%
90 Day-8.1%-3.6%2.6%
1 Year13.3%12.0%3.4%-9.8%16.3%14.0%
3 Year44.4%39.4%24.2%0.4%43.2%34.0%
5 Year117.4%104.7%32.7%3.9%65.9%47.6%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

21.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IOSP ($91.03) is trading below our estimate of fair value ($115.53)

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


Price To Earnings Ratio

PE vs Industry: IOSP is good value based on its PE Ratio (19.9x) compared to the Chemicals industry average (22x).

PE vs Market: IOSP is poor value based on its PE Ratio (19.9x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: IOSP is poor value based on its PEG Ratio (3x)


Price to Book Ratio

PB vs Industry: IOSP is overvalued based on its PB Ratio (2.4x) compared to the US Chemicals industry average (1.9x).


Next Steps

Future Growth

How is Innospec forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

6.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IOSP's forecast earnings growth (6.6% per year) is above the savings rate (1.7%).

Earnings vs Market: IOSP's earnings (6.6% per year) are forecast to grow slower than the US market (13.1% per year).

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

Revenue vs Market: IOSP's revenue (3.1% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: IOSP's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if IOSP's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Innospec performed over the past 5 years?

-3.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: IOSP has high quality earnings.

Growing Profit Margin: IOSP's current net profit margins (7.4%) are higher than last year (5.8%).


Past Earnings Growth Analysis

Earnings Trend: IOSP's earnings have declined by -3.7% per year over the past 5 years.

Accelerating Growth: IOSP's earnings growth over the past year (32%) exceeds its 5-year average (-3.7% per year).

Earnings vs Industry: IOSP earnings growth over the past year (32%) exceeded the Chemicals industry -15.9%.


Return on Equity

High ROE: IOSP's Return on Equity (12.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Innospec's financial position?


Financial Position Analysis

Short Term Liabilities: IOSP's short term assets ($630.3M) exceed its short term liabilities ($303.5M).

Long Term Liabilities: IOSP's short term assets ($630.3M) exceed its long term liabilities ($246.4M).


Debt to Equity History and Analysis

Debt Level: IOSP's debt to equity ratio (6.4%) is considered satisfactory.

Reducing Debt: IOSP's debt to equity ratio has reduced from 27% to 6.4% over the past 5 years.

Debt Coverage: IOSP's debt is well covered by operating cash flow (275.8%).

Interest Coverage: IOSP's interest payments on its debt are well covered by EBIT (33.6x coverage).


Balance Sheet

Inventory Level: IOSP has a high level of physical assets or inventory.

Debt Coverage by Assets: IOSP's debt is covered by short term assets (assets are 10.8x debt).


Next Steps

Dividend

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

1.14%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.5%markettop25%3.8%industryaverage2.3%forecastin3Years1.1%

Current dividend yield vs market & industry

Notable Dividend: IOSP's dividend (1.14%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.48%).

High Dividend: IOSP's dividend (1.14%) is low compared to the top 25% of dividend payers in the US market (3.77%).


Stability and Growth of Payments

Stable Dividend: IOSP's dividend payments have been volatile in the past 10 years.

Growing Dividend: IOSP's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.3%), IOSP's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IOSP's dividends in 3 years are forecast to be well covered by earnings (17.4% payout ratio).


Next Steps

Management

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

7.5yrs

Average management tenure


CEO

Patrick Williams (54yo)

10.8yrs

Tenure

US$5,413,268

Compensation

Mr. Patrick S. Williams has been the Chief Executive Officer and President at Innospec Inc. since April 2, 2009. He has been a Director of Innospec Inc, since April 2, 2009. Mr. Williams has been the Chief ...


CEO Compensation Analysis

Compensation vs Market: Patrick's total compensation ($USD5.41M) is above average for companies of similar size in the US market ($USD3.87M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Patrick Williams
President10.8yrsUS$5.41m0.65% $14.6m
Ian Cleminson
Executive VP & CFO13.6yrsUS$1.20m0.086% $1.9m
Philip Boon
COO & Executive VP4.3yrsUS$1.28m0.039% $872.7k
Ian McRobbie
Chief Technology Officer and Senior VP of Research & Technology17.8yrsUS$869.22k0.15% $3.3m
Brian Watt
Senior Vice President of Corporate Development & Investor Relations2.5yrsUS$945.95k0.10% $2.3m
Christopher Parsons
Head of Group Finance3.2yrsno datano data
David Jones
VP, General Counsel1.9yrsno datano data
Catherine Hessner
Senior Vice President of Human Resources16.5yrsUS$649.28k0.061% $1.4m
Thomas Entwistle
President of Oilfield Services - Americas0yrsno datano data
Steven Williams
Executive Director0yrsno datano data

7.5yrs

Average Tenure

60yo

Average Age

Experienced Management: IOSP's management team is seasoned and experienced (7.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Patrick Williams
President10.8yrsUS$5.41m0.65% $14.6m
Claudia Poccia
Non-Executive Director0.6yrsno datano data
David Landless
Non-Employee Director4.1yrsUS$138.18k0.0086% $193.0k
Hugh Graham Aldous
Non-Executive Director15.1yrsUS$135.18k0.13% $3.0m
Joachim Roeser
Non-Executive Director12.1yrsUS$137.18k0.021% $478.7k
Robert Paller
Non-Executive Director10.3yrsUS$137.18k0.034% $763.2k
Lawrence Padfield
Non-Executive Director7.2yrsUS$122.90k0.012% $264.4k
Milton Blackmore
Non-Executive Chairman7.8yrsUS$207.18k0.029% $637.1k

9.0yrs

Average Tenure

64yo

Average Age

Experienced Board: IOSP's board of directors are considered experienced (9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: IOSP insiders have only sold shares 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

Innospec Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Innospec Inc.
  • Ticker: IOSP
  • Exchange: NasdaqGS
  • Founded: 1938
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: US$2.231b
  • Shares outstanding: 24.51m
  • Website: https://www.innospecinc.com

Number of Employees


Location

  • Innospec Inc.
  • 8310 South Valley Highway
  • Suite 350
  • Englewood
  • Colorado
  • 80112
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
IOSPNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMay 1998
OCTDB (Deutsche Boerse AG)YesCommon StockDEEURMay 1998
0JAXLSE (London Stock Exchange)YesCommon StockGBUSDMay 1998

Biography

Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals worldwide. It operates through four segments: Fuel Specialties, Performance Chemicals, Oilfield Services, and Octane Additives. The Fuel Specialties segment offers a range of specialty chemical products used as additives in various fuels. Its products are used in the operation of automotive, marine, and aviation engines; power station generators; and heating oil. The Performance Chemicals segment provides technology-based solutions for its customers’ processes or products focused in the personal care, home care, agrochemical, and metal extraction markets. The Oilfield Services segment develops and markets products to prevent loss of mud in drilling operations; chemical solutions for fracturing, stimulation, and completion operations; and products for oil and gas production, which enable flow assurance and asset integrity. The Octane Additives segment produces and sells tetra ethyl lead (TEL) for use in automotive gasoline. This segment is also involved in environmental remediation business that manages the cleanup of redundant TEL facilities. The company sells its products primarily to oil and gas exploration and production companies, oil refineries, fuel manufacturers and users, personal care and home care companies, formulators of agrochemical and metal extraction preparations, and other chemical and industrial companies. The company was formerly known as Octel Corp. and changed its name to Innospec Inc. in January 2006. Innospec Inc. was founded in 1938 and is headquartered in Englewood, Colorado. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 01:05
End of Day Share Price2020/02/24 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.