NYSE:KWR

Stock Analysis Report

Executive Summary

Quaker Chemical Corporation, doing business as Quaker Houghton, engages in the development, production, and marketing of various formulated specialty chemical products for various industrial and manufacturing applications.

Rewards

Trading at 36.2% below its fair value

Earnings are forecast to grow 61.69% per year

Pays a reliable dividend of 1.14%

Risk Analysis

Debt is not well covered by operating cash flow

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Profit margins (2.8%) are lower than last year (6.8%)

+ 1 more risk


Snowflake Analysis

Reasonable growth potential average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

9.6%

KWR

13.1%

US Chemicals

12.5%

US Market


1 Year Return

-33.9%

KWR

-31.8%

US Chemicals

-12.7%

US Market

Return vs Industry: KWR underperformed the US Chemicals industry which returned -31.2% over the past year.

Return vs Market: KWR underperformed the US Market which returned -11.9% over the past year.


Shareholder returns

KWRIndustryMarket
7 Day9.6%13.1%12.5%
30 Day-14.4%-17.7%-14.7%
90 Day-18.0%-29.9%-21.5%
1 Year-33.4%-33.9%-22.3%-31.8%-10.9%-12.7%
3 Year7.7%4.9%-8.9%-26.5%12.6%5.4%
5 Year64.1%55.2%2.1%-20.2%31.9%17.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

36.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KWR ($134.87) is trading below our estimate of fair value ($211.42)

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


Price To Earnings Ratio

PE vs Industry: KWR is poor value based on its PE Ratio (64.7x) compared to the Chemicals industry average (15x).

PE vs Market: KWR is poor value based on its PE Ratio (64.7x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: KWR is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: KWR is overvalued based on its PB Ratio (1.9x) compared to the US Chemicals industry average (1.3x).


Next Steps

Future Growth

How is Quaker Chemical forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

61.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KWR's forecast earnings growth (61.7% per year) is above the savings rate (1.7%).

Earnings vs Market: KWR's earnings (61.7% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: KWR's revenue (14.5% per year) is forecast to grow faster than the US market (7.3% per year).

High Growth Revenue: KWR's revenue (14.5% 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 low in 3 years time (9.6%).


Next Steps

Past Performance

How has Quaker Chemical performed over the past 5 years?

-7.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KWR has a large one-off loss of $75.6M impacting its December 31 2019 financial results.

Growing Profit Margin: KWR's current net profit margins (2.8%) are lower than last year (6.8%).


Past Earnings Growth Analysis

Earnings Trend: KWR's earnings have declined by -7.5% 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 (-46.8%) over the past year, making it difficult to compare to the Chemicals industry average (-7.2%).


Return on Equity

High ROE: KWR's Return on Equity (2.6%) is considered low.


Next Steps

Financial Health

How is Quaker Chemical's financial position?


Financial Position Analysis

Short Term Liabilities: KWR's short term assets ($716.0M) exceed its short term liabilities ($359.9M).

Long Term Liabilities: KWR's short term assets ($716.0M) do not cover its long term liabilities ($1.2B).


Debt to Equity History and Analysis

Debt Level: KWR's debt to equity ratio (74.1%) is considered high.

Reducing Debt: KWR's debt to equity ratio has increased from 20.7% to 74.1% over the past 5 years.

Debt Coverage: KWR's debt is not well covered by operating cash flow (8.9%).

Interest Coverage: KWR's interest payments on its debt are well covered by EBIT (7x coverage).


Balance Sheet

Inventory Level: KWR has a low level of unsold assets or inventory.

Debt Coverage by Assets: KWR's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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

1.14%

Current Dividend Yield


Upcoming Dividend Payment

TodayMar 30 2020Ex Dividend DateApr 15 2020Dividend Pay DateApr 30 202015 days from Ex DividendBuy in the next 16 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: KWR's dividend (1.14%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.98%).

High Dividend: KWR's dividend (1.14%) is low compared to the top 25% of dividend payers in the US market (5.49%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (73.2%), KWR's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KWR's dividends in 3 years are forecast to be well covered by earnings (17.1% payout ratio).


Next Steps

Management

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

5.8yrs

Average management tenure


CEO

Mike Barry (61yo)

11.42s

Tenure

US$4,848,181

Compensation

Mr. Michael F. Barry, also known as Mike, has been the Chairman of the Board at Quaker Chemical Corporation since May 13, 2009 and has also been its Chief Executive Officer and President since October 4, 2 ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD4.85M) is about average for companies of similar size in the US market ($USD4.58M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Michael Barry
Chairman of the Board11.42yrsUS$4.85m0.90% $21.5m
Mary Hall
Senior VP4.33yrsUS$924.20k0.030% $717.0k
Wilbert Platzer
Senior VP of Global Operationsno dataUS$803.29k0.038% $899.3k
Joseph Berquist
Senior VP of Global Specialty Businesses & Chief Strategy Officer9.92yrsUS$868.89k0.076% $1.8m
Shane Hostetter
VP of Finance & Chief Accounting Officer5.5yrsno data0.015% $367.8k
David Slinkman
Senior VP & Chief Technology Officer0.58yrno data0.018% $436.9k
Robert Traub
Senior VP8yrsno data0.030% $718.2k
Jan Nieman
VP of Global Strategy & Marketing and Global Leader – Grease & Fluid Power5.83yrsUS$706.21k0.027% $641.4k
Kym Johnson
Senior VP & Chief Human Resources Officer0.58yrno datano data
Dieter Laininger
Senior VP & MD of Asia and Pacific8.75yrsno data0.034% $821.5k

5.8yrs

Average Tenure

55yo

Average Age

Experienced Management: KWR's management team is seasoned and experienced (5.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Barry
Chairman of the Board11.42yrsUS$4.85m0.90% $21.5m
Robert Chappell
Independent Director23.17yrsUS$134.83k0.17% $4.0m
Donald Caldwell
Lead Director3.83yrsUS$153.33k0.031% $737.3k
Robert Rock
Independent Director24.17yrsUS$136.08k0.068% $1.6m
Ramaswami Seshasayee
Additional Director0.58yrno data0.0031% $73.2k
Jeffry Frisby
Independent Director14.17yrsUS$134.33k0.038% $907.6k
Sanjay Hinduja
Additional Director0.58yrno data0.0031% $73.2k
Mark Douglas
Independent Director7.17yrsUS$133.08k0.013% $310.7k
William Osborne
Independent Director4yrsUS$131.83k0.020% $471.2k
Fay West
Independent Director4yrsUS$142.58k0.017% $399.4k

5.6yrs

Average Tenure

62yo

Average Age

Experienced Board: KWR's board of directors are considered experienced (5.6 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 been diluted in the past year, with total shares outstanding growing by 14%.


Top Shareholders

Company Information

Quaker Chemical Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Quaker Chemical Corporation
  • Ticker: KWR
  • Exchange: NYSE
  • Founded: 1918
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: US$2.392b
  • Shares outstanding: 17.73m
  • Website: https://www.quakerchem.com

Number of Employees


Location

  • Quaker Chemical Corporation
  • One Quaker Park
  • 901 East Hector Street
  • Conshohocken
  • Pennsylvania
  • 19428-2380
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KWRNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1972
QUCDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1972

Biography

Quaker Chemical Corporation, doing business as Quaker Houghton, engages in the development, production, and marketing of various formulated specialty chemical products for various industrial and manufacturing applications. The company operates through four segments: Americas; Europe, Middle East and Africa (EMEA); Asia/Pacific; and Global Specialty Businesses. Its principal 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. The company also offers operating equipment; and chemical management services. It serves metalworking, metals, and industrial end markets, including steel, aluminum, aerospace, defense, transportation-original equipment manufacturer, transportation-components, offshore sub-sea energy, architectural aluminum, construction, tube and pipe, can and container, mining, specialty coatings, and specialty greases. The company was formerly known as Quaker Chemical Products Corporation and changed its name to Quaker Chemical Corporation in August 1962. Quaker Chemical Corporation was founded in 1918 and is headquartered in Conshohocken, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 01:59
End of Day Share Price2020/03/27 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.