KWR Stock Overview
Quaker Chemical Corporation develops, produces, and markets various formulated chemical specialty products for a range of heavy industrial and manufacturing applications.
Quaker Chemical Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$153.78|
|52 Week High||US$276.60|
|52 Week Low||US$129.80|
|1 Month Change||-14.58%|
|3 Month Change||2.85%|
|1 Year Change||-36.10%|
|3 Year Change||0.70%|
|5 Year Change||2.69%|
|Change since IPO||1,011.66%|
Recent News & Updates
Returns On Capital Signal Tricky Times Ahead For Quaker Chemical (NYSE:KWR)
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Ideally, a...
Quaker Chemical: The Current Share Price Is Starting To Look Attractive
Summary Quaker Chemical's share price declined by 41%. Current headwinds temporarily depressed the company's margins. Inflationary pressures are something likely temporary while the company's structural operations remain intact as net sales keep increasing. The company has been increasing the dividend for many years and the potential for further raises is huge as the company still has to deleverage the balance sheet. The company is a buy at this price, but dollar cost averaging should be strongly considered. Investment thesis Quaker Chemical (KWR), whose name was changed in 2019 to Quaker Houghton, is facing a large number of headwinds that are having a direct impact on its operations. Inflationary pressures are increasing the cost of goods sold, and margins are also being affected by increased labor costs, higher transportation prices, supply chain issues, COVID-19 disruptions in China, and lower raw material availability. These headwinds caused a recent price decline of ~41%, which represents an opportunity to acquire shares at a reduced price for those dividend growth investors focused on the long term as headwinds are caused by current macroeconomic events and not by the nature of the company's operations. In fact, the Houghton acquisition has boosted the company's net sales, and the only problem for the company is that the current headwinds will make the deleveraging process slower than expected. A brief overview of the company Quaker Houghton is the global leader in industrial process fluids with operations in over 25 countries. The company was founded in 1918 and its market cap currently stands at $3 billion, employing around 4,700 full-time workers worldwide. Before 2019, the company's name was Quaker Chemical, but its name changed when it was combined with Houghton, a family-owned distribution and manufacturing chemical company, in 2019, forming Quaker Houghton. The company develops, produces, and sells a wide range of formulated chemical specialty products and offers chemical management services. These products include metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids and surface treatment chemicals. Quaker Houghton logo (Quakerhoughton.com) The company also offers chemical management services for various heavy industrial and manufacturing applications, and its customers include thousands of the world's most advanced and specialized steel, aluminum, automotive, aerospace, offshore, can, mining, and metalworking companies. KWR data by YCharts Currently, the share price stands at $174.32, which represents a 40.83% decline from all-time highs of $294.60 on February 22, 2021. This fall in price, however, is not in vain since operations have been weakened as a result of the current macroeconomic landscape, and this is the price that investors must pay in the form of patience in exchange for the discount in the price of the shares. Recent acquisitions In August 2019, the company acquired Houghton, a leading global provider of specialty chemicals and technical services for metalworking and other industrial applications, for $170.8 in cash, around 4.3 million shares of the resulting company, and the refinancing of approximately $660 million of Houghton's net indebtedness. In total, the deal cost Quaker Chemical ~$1.6 billion. Following this transformative acquisition, in December 2020, the company acquired Coral Chemical Corporation, a U.S. provider of metal finishing fluid solutions, for ~$53 million. The acquisition spree continued in 2021. During that year, the company acquired a tin-plating solutions business for the steel end market for approximately $25.0 million, certain assets for the company's milling maskants product line for approximately $2.8 million, and the remaining interest in Grindaix-GmbH, a Germany-based high-tech provider of coolant control and delivery systems, for approximately $2.9 million. It also acquired Baron Industries, a U.S. provider of vacuum impregnation services of castings, powder metal, and electrical components for an initial payment of ~$7.1 million, and a business that provides hydraulic fluids, coolants, cleaners, and rust preventative oils for approximately $3.7 million. And lastly, in 2022 January 2022, it acquired a business that provides pickling inhibitor technologies for the steel industry, drawing lubricants and stamping oil for metalworking, and various other lubrication, rust preventative, and cleaner applications, for approximately $8.0 million, and another business that operates in the sealing and impregnation of metal castings for the automotive sector, as well as impregnation resin and impregnation systems for metal parts for ~$1.4 million. Net sales are skyrocketing thanks to the recently acquired businesses Using 2021 as a reference, 23.4% of the company's total net sales are provided by operations of the metal removal fluids product line, whereas rolling lubricants provides 22.2%, and hydraulic fluids 13.6%. The company's net sales have more than doubled in the past decade, mostly boosted by the Houghton acquisition. Quaker Chemicals net sales (10-K filings ) The coronavirus pandemic crisis caused a negative impact on the company's volumes and net sales in 2020, which prevented seeing the impact of Houghton's operations until 2021. Now, it can be stated that net sales increased by 55.38% from 2018 (before the acquisition) to 2021 (when the acquisition took full effect). During the second quarter of 2022, the company reported a 13.12% increase in net sales, which is attributable to the increase in the prices of its products as volumes actually declined by 4% year over year due to decreasing demand from Russia and minor divestitures resulting from the combination with Houghton. The company's growth is currently being limited by issues in raw material availability, although this is temporary. The top five customers account for ~10% of the company's total net sales, while the largest customer accounts for 3% of total net sales, so the company really does not depend heavily on any one customer thanks to the large number of total customers, which currently stands at ~15,000 worldwide. Using 2021 as reference, 32.52% of net sales are provided by operations within the Americas, 27.26% from EMEA, 22.04% from Asia-Pacific, and 18.18% from the global specialty businesses segment. But despite the recent increase in net sales, the recent share price declined due to lower margins, which caused a drop in the P/S ratio to 1.671. KWR P/S Ratio data by YCharts This means that the company currently generates $0.60 for each dollar held in shares by investors, annually. This ratio is significantly lower than the average of 2.023 during the past decade and the highs of 3.739 in the share price spike that took place after the coronavirus pandemic crisis dip. Still, it is very important to understand that investors are willing to pay less for the company's sales due to Quaker Houghton's loss of ability to convert those sales into actual cash as a result of the recent decline in profit margins. Margins are temporarily weak The company is currently facing a series of headwinds that are having a direct impact on profit margins, including the increasing cost of goods sold due to inflationary pressures, declining raw material availability, COVID-19 disruptions in China, supply chain and logistic issues, unfavorable FOREX, labor shortages, decreasing demand in some end markets, and the current Ukrainian war. Trailing twelve months' gross profit margins of 31.12% is well below the highs of 38.05% reached during the last decade. EBITDA margins of 10.79% also suffered a decline compared to prior years due to the aforementioned headwinds. KWR Gross Profit Margin data by YCharts Furthermore, gross profit margins of 30.38% during the second quarter of 2022 as the price of raw materials keep increasing represents a slight deterioration, and the same happens with EBITDA margins, which was 8.95% during the quarter. Still, it is very important to note that these margins are more than acceptable and allow the company to continue to be highly profitable. And what is more, these headwinds are, in my opinion, something temporary as they come from macroeconomic issues, and not by the nature of the company's operations. Currently, the management is working to take further pricing action to adapt the price of its products to the current costs of goods sold, but it is normal for margins to continue contracted in the short and medium term as long as inflation remains significantly above 2% since prices often take time to update as transferring them to the end customer is a relatively long process. Debt has skyrocketed, and entering a deleveraging phase should soon become a top priority Before the acquisition of Houghton, the company enjoyed a debt-free balance sheet in terms of net debt, but 2019 closed with long-term debt of $882.44 million. Currently, the long-term debt stands at $986.85 million while the company holds $202.35 cash on hand. KWR Total Long Term Debt (Quarterly) data by YCharts As a consequence of the acquired debt, the company now has to cover an interest payment of more than $25 million annually. Furthermore, interest expenses increased year over year due to increased borrowing costs and negative FOREX, and an expense of $6.49 million during the last quarter suggests trailing twelve months' interest expenses may soon reach $26 million, which is significantly higher compared to the current trailing twelve months' interest expenses of $23.08 million. KWR Total Interest Expense ((TTM)) data by YCharts This will significantly limit the increase in dividends in the medium and long term until the company manages to reduce it significantly. This is so because the current interest expense is very close to the expense that the company faces each year to issue the dividend payment, and this is something that didn't happen before the acquisition of Houghton. The dividend is safe, but the company will likely have to significantly reduce its debt pile before continuing to increase it sustainably The company is a very reliable dividend payer as it has been paying a growing dividend for many years. These raises have recently accelerated as the dividend payout almost doubled during the past decade, and the last quarterly dividend increase took place in July 2022 when the company announced a 5% raise to $0.435 per quarter. KWR Dividend data by YCharts Still, and in my opinion, the rate of growth of dividends will slow down in the coming years due to two main factors: firstly, the dividend expense has increased significantly since the acquisition of Houghton as a result of share dilution, and secondly, because the expense in interest is now larger than the dividends the company paid before the acquisition. But it is also important to keep in mind that this dividend growth slowdown will be likely temporary because once the debt is significantly reduced, the company will be able to start using the cash generated by the newly acquired company to continue raising the dividend as it has done in recent years. The question is whether the management will decide to reverse the share dilution via share repurchases after that, something that investors should not count on as making significant share repurchases has not been a priority so far. Next, I present a table where I have calculated the company's cash payout ratio in order to determine the sustainability of the current dividend payout and the ability of the company to generate surpluses. To do this, I have calculated what percentage of the cash from operations is used to pay the dividend and cover the interest on the acquired debt. In this way, we will be able to determine how much cash the company has left over to continue with growth initiatives and reduce its current debt levels. Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 Cash from operations (in millions) $73.80 $54.69 $73.43 $73.75 $64.76 $78.78 $82.37 $178.39 $48.93 Dividends (in millions) $13.02 $14.56 $16.51 $17.63 $18.61 $19.32 $21.83 $27.56 $28.60 Interest expense (in millions) $2.92 $2.37 $2.59 $2.89 $3.89 $6.16 $16.98 $26.60 $22.33 Cash payout ratio 21.60% 30.96% 26.01% 27.81% 34.75% 32.34% 47.11% 30.34% 104.07%
Quaker Chemical (NYSE:KWR) Is Paying Out A Larger Dividend Than Last Year
Quaker Chemical Corporation's ( NYSE:KWR ) dividend will be increasing from last year's payment of the same period to...
|KWR||US Chemicals||US Market|
Return vs Industry: KWR underperformed the US Chemicals industry which returned -15.5% over the past year.
Return vs Market: KWR underperformed the US Market which returned -22.1% over the past year.
|KWR Average Weekly Movement||8.5%|
|Chemicals Industry Average Movement||6.3%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: KWR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.
Volatility Over Time: KWR's weekly volatility (9%) has been stable over the past year.
About the Company
Quaker Chemical Corporation develops, produces, and markets various formulated chemical specialty products for a range of heavy industrial and manufacturing applications. The company operates through four segments: Americas; Europe, Middle East, and Africa; Asia/Pacific; and Global Specialty Businesses. It offers metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, metal finishing fluids, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids, and surface treatment chemicals.
Quaker Chemical Fundamentals Summary
|KWR fundamental statistics|
Is KWR overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|KWR income statement (TTM)|
|Cost of Revenue||US$1.28b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||4.63|
|Net Profit Margin||4.46%|
How did KWR perform over the long term?See historical performance and comparison
1.1%Current Dividend Yield
Does KWR pay a reliable dividends?See KWR dividend history and benchmarks
|Quaker Chemical dividend dates|
|Ex Dividend Date||Oct 14 2022|
|Dividend Pay Date||Oct 31 2022|
|Days until Ex dividend||15 days|
|Days until Dividend pay date||32 days|
Does KWR pay a reliable dividends?See KWR dividend history and benchmarks
Is KWR undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 0/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for KWR?
Other financial metrics that can be useful for relative valuation.
|What is KWR's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does KWR's PE Ratio compare to its peers?
|KWR PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
FUL H.B. Fuller
KWR Quaker Chemical
Price-To-Earnings vs Peers: KWR is expensive based on its Price-To-Earnings Ratio (33.2x) compared to the peer average (14.9x).
Price to Earnings Ratio vs Industry
How does KWR's PE Ratio compare vs other companies in the US Chemicals Industry?
Price-To-Earnings vs Industry: KWR is expensive based on its Price-To-Earnings Ratio (33.2x) compared to the US Chemicals industry average (14x)
Price to Earnings Ratio vs Fair Ratio
What is KWR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||33.2x|
|Fair PE Ratio||28.6x|
Price-To-Earnings vs Fair Ratio: KWR is expensive based on its Price-To-Earnings Ratio (33.2x) compared to the estimated Fair Price-To-Earnings Ratio (28.6x).
Share Price vs Fair Value
What is the Fair Price of KWR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: KWR ($153.78) is trading above our estimate of fair value ($138.93)
Significantly Below Fair Value: KWR is trading above our estimate of fair value.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.
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How is Quaker Chemical forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?
Future Growth Score4/6
Future Growth Score 4/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: KWR's forecast earnings growth (34.7% per year) is above the savings rate (1.9%).
Earnings vs Market: KWR's earnings (34.7% per year) are forecast to grow faster than the US market (14.8% per year).
High Growth Earnings: KWR's earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: KWR's revenue (3.6% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: KWR's revenue (3.6% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: KWR's Return on Equity is forecast to be high in 3 years time (24.8%)
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How has Quaker Chemical performed over the past 5 years?
Past Performance Score1/6
Past Performance Score 1/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: KWR has a large one-off loss of $26.8M impacting its June 30 2022 financial results.
Growing Profit Margin: KWR's current net profit margins (4.5%) are lower than last year (9.1%).
Past Earnings Growth Analysis
Earnings Trend: KWR's earnings have grown significantly by 26.5% per year over the past 5 years.
Accelerating Growth: KWR's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: KWR had negative earnings growth (-43.7%) over the past year, making it difficult to compare to the Chemicals industry average (21.1%).
Return on Equity
High ROE: KWR's Return on Equity (6.3%) is considered low.
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How is Quaker Chemical's financial position?
Financial Health Score2/6
Financial Health Score 2/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: KWR's short term assets ($1.0B) exceed its short term liabilities ($400.7M).
Long Term Liabilities: KWR's short term assets ($1.0B) do not cover its long term liabilities ($1.2B).
Debt to Equity History and Analysis
Debt Level: KWR's net debt to equity ratio (59%) is considered high.
Reducing Debt: KWR's debt to equity ratio has increased from 16.7% to 74.2% over the past 5 years.
Debt Coverage: KWR's debt is not well covered by operating cash flow (5.1%).
Interest Coverage: KWR's interest payments on its debt are well covered by EBIT (6.4x coverage).
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What is Quaker Chemical current dividend yield, its reliability and sustainability?
Dividend Score 3/6
Cash Flow Coverage
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
|Quaker Chemical Dividend Yield vs Market|
|Company (Quaker Chemical)||1.1%|
|Market Bottom 25% (US)||1.6%|
|Market Top 25% (US)||4.6%|
|Industry Average (Chemicals)||2.4%|
|Analyst forecast in 3 Years (Quaker Chemical)||1.1%|
Notable Dividend: KWR's dividend (1.13%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.67%).
High Dividend: KWR's dividend (1.13%) is low compared to the top 25% of dividend payers in the US market (4.69%).
Stability and Growth of Payments
Stable Dividend: KWR's dividends per share have been stable in the past 10 years.
Growing Dividend: KWR's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (35.6%), KWR's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its high cash payout ratio (152.5%), KWR's dividend payments are not well covered by cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Andy Tometich (55 yo)
Mr. Andrew E. Tometich, also known as Andy, serves as Chief Executive Officer and President at Quaker Chemical Corporation since December 1, 2021 and serves as its Director. Mr. Tometich served as Executiv...
CEO Compensation Analysis
|Andy Tometich's Compensation vs Quaker Chemical Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$4m||US$163k|
Compensation vs Market: Andy's total compensation ($USD4.25M) is below average for companies of similar size in the US market ($USD6.87M).
Compensation vs Earnings: Insufficient data to compare Andy's compensation with company performance.
Experienced Management: KWR's management team is considered experienced (3.1 years average tenure).
Experienced Board: KWR's board of directors are considered experienced (9.7 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: KWR insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|15 Aug 22||SellUS$285,373||Wilbert Platzer||Individual||1,484||US$192.30|
|15 Aug 22||SellUS$283,919||Dieter Laininger||Individual||1,484||US$191.32|
|10 Aug 22||SellUS$7,333||David Will||Individual||38||US$192.98|
|10 Aug 22||BuyUS$9,213,470||Gulf Hungary Holding Korlatolt Felelossegu Tarsasag||Company||50,000||US$184.27|
|10 May 22||SellUS$65,214||David Will||Individual||424||US$153.81|
|16 Nov 21||SellUS$166,489||Michael Shannon||Individual||620||US$268.53|
|11 Nov 21||SellUS$181,219||Wilbert Platzer||Individual||673||US$269.27|
|09 Nov 21||SellUS$758,806||Dieter Laininger||Individual||2,808||US$270.23|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Quaker Chemical Corporation's employee growth, exchange listings and data sources
- Name: Quaker Chemical Corporation
- Ticker: KWR
- Exchange: NYSE
- Founded: 1918
- Industry: Specialty Chemicals
- Sector: Materials
- Implied Market Cap: US$2.757b
- Shares outstanding: 17.93m
- Website: https://www.quakerhoughton.com
Number of Employees
- Quaker Chemical Corporation
- One Quaker Park
- 901 East Hector Street
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|KWR||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||Dec 1972|
|QUC||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Dec 1972|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/28 00:00|
|End of Day Share Price||2022/09/28 00:00|
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.