NYSE:KWR

Stock Analysis Report

Executive Summary

Quaker Chemical Corporation develops, produces, and markets various formulated chemical specialty products for a range of heavy industrial and manufacturing applications in North America, Europe, the Middle East, Africa, the Asia/Pacific, and South America.

Rewards

Trading at 30.7% below its fair value

Earnings are forecast to grow 56.17% per year

Pays a reliable dividend of 0.92%

Risk Analysis

Debt is not well covered by operating cash flow

Large one-off items impacting financial results

Profit margins (2.5%) are lower than last year (4.8%)

Shareholders have been diluted in the past year



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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.4%

KWR

3.1%

US Chemicals

2.0%

US Market


1 Year Return

-14.5%

KWR

-0.6%

US Chemicals

23.5%

US Market

Return vs Industry: KWR underperformed the US Chemicals industry which returned 1.6% over the past year.

Return vs Market: KWR underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

KWRIndustryMarket
7 Day2.4%3.1%2.0%
30 Day4.2%1.1%4.3%
90 Day5.1%6.4%12.2%
1 Year-13.8%-14.5%15.1%-0.6%26.1%23.5%
3 Year38.2%34.5%36.2%10.7%53.1%43.2%
5 Year121.8%109.8%50.0%17.9%75.5%56.1%

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?

30.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KWR ($168.19) is trading below our estimate of fair value ($242.85)

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 (97.8x) compared to the Chemicals industry average (20.8x).

PE vs Market: KWR is poor value based on its PE Ratio (97.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: KWR is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: KWR is overvalued based on its PB Ratio (2.5x) compared to the US Chemicals industry average (2.2x).


Next Steps

Future Growth

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

73.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KWR's forecast earnings growth (56.2% per year) is above the savings rate (1.7%).

Earnings vs Market: KWR's earnings (56.2% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: KWR's revenue (18.2% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: KWR's revenue (18.2% 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 (9.5%).


Next Steps

Past Performance

How has Quaker Chemical performed over the past 5 years?

-6.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KWR has a large one-off loss of $62.4M impacting its September 30 2019 financial results.

Growing Profit Margin: KWR's current net profit margins (2.5%) are lower than last year (4.8%).


Past Earnings Growth Analysis

Earnings Trend: KWR's earnings have declined by -6.6% 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 (-42.2%) over the past year, making it difficult to compare to the Chemicals industry average (-17%).


Return on Equity

High ROE: KWR's Return on Equity (2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Quaker Chemical's financial position?


Financial Position Analysis

Short Term Liabilities: KWR's short term assets ($724.6M) exceed its short term liabilities ($345.8M).

Long Term Liabilities: KWR's short term assets ($724.6M) do not cover its long term liabilities ($1.2B).


Debt to Equity History and Analysis

Debt Level: KWR's debt to equity ratio (71.7%) is considered high.

Reducing Debt: KWR's debt to equity ratio has increased from 17.1% to 71.7% over the past 5 years.

Debt Coverage: KWR's debt is not well covered by operating cash flow (7.3%).

Interest Coverage: KWR's interest payments on its debt are well covered by EBIT (12.5x 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?

0.91%

Current Dividend Yield


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.1%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: KWR's dividend (0.92%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: KWR's dividend (0.92%) is low compared to the top 25% of dividend payers in the US market (3.66%).


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: At its current payout ratio (87.8%), KWR's 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 (18% payout ratio).


Next Steps

Management

What is the CEO of Quaker Chemical's salary, the management and board of directors tenure and is there insider trading?

7.9yrs

Average management tenure


CEO

Mike Barry (61yo)

11.3yrs

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 ($USD4.85M) is about average for companies of similar size in the US market ($USD4.99M).

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


Management Age and Tenure

7.9yrs

Average Tenure

58yo

Average Age

Experienced Management: KWR's management team is seasoned and experienced (7.9 years average tenure).


Board Age and Tenure

5.5yrs

Average Tenure

62yo

Average Age

Experienced Board: KWR's board of directors are considered experienced (5.5 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellUS$50,41320 May 19
Donald Caldwell
EntityIndividual
Role
Lead Director
Lead Director
Shares250
Max PriceUS$201.65

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.8%.


Management Team

  • Mike Barry (61yo)

    Chairman of the Board

    • Tenure: 11.3yrs
    • Compensation: US$4.85m
  • Wilbert Platzer (58yo)

    President & MD - EMEA

    • Compensation: US$803.29k
  • Jan Nieman (58yo)

    VP of Global Strategy & Marketing and Global Leader – Grease & Fluid Power

    • Tenure: 5.7yrs
    • Compensation: US$706.21k
  • Joseph Berquist (48yo)

    MD of North America Operations & VP

    • Tenure: 9.8yrs
    • Compensation: US$868.89k
  • Dieter Laininger (56yo)

    VP, MD of South America & Global Leader of Primary Metals

    • Tenure: 8.6yrs
  • Ronald Ettinger (67yo)

    Vice President of Human Resources

    • Tenure: 8.1yrs
  • Robert Traub (54yo)

    VP, General Counsel & Corporate Secretary

    • Tenure: 7.8yrs
  • Shane Hostetter (38yo)

    Global Controller & Principal Accounting Officer

    • Adrian Steeples (59yo)

      MD of Asia Pacific & VP

      • Tenure: 6.5yrs
    • Mary Hall (61yo)

      CFO, VP & Treasurer

      • Tenure: 4.2yrs
      • Compensation: US$924.20k

    Board Members

    • Mike Barry (61yo)

      Chairman of the Board

      • Tenure: 11.3yrs
      • Compensation: US$4.85m
    • Bob Chappell (74yo)

      Independent Director

      • Tenure: 23yrs
      • Compensation: US$134.83k
    • Don Caldwell (73yo)

      Lead Director

      • Tenure: 3.7yrs
      • Compensation: US$153.33k
    • Robert Rock (69yo)

      Independent Director

      • Tenure: 24yrs
      • Compensation: US$136.08k
    • Sesh Seshasayee (71yo)

      Additional Director

      • Tenure: 0.4yrs
    • Jeff Frisby (63yo)

      Independent Director

      • Tenure: 14yrs
      • Compensation: US$134.33k
    • Sanjay Hinduja (55yo)

      Additional Director

      • Tenure: 0.4yrs
    • Mark Douglas (57yo)

      Independent Director

      • Tenure: 7yrs
      • Compensation: US$133.08k
    • Bill Osborne (59yo)

      Independent Director

      • Tenure: 3.9yrs
      • Compensation: US$131.83k
    • Fay West (50yo)

      Independent Director

      • Tenure: 3.9yrs
      • Compensation: US$142.58k

    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$3.007b
    • 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
    • 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 develops, produces, and markets various formulated chemical specialty products for a range of heavy industrial and manufacturing applications in North America, Europe, the Middle East, Africa, the Asia/Pacific, and South America. The company’s products include rolling lubricants used by manufacturers of steel in the hot and cold rolling of steel, and aluminum in the hot rolling of aluminum; machining and grinding compounds for use in cutting, shaping, and grinding metal parts; hydraulic fluids for steel, metalworking, and other customers to operate hydraulic equipment; corrosion preventives to protect metals during manufacture, storage, and shipment; and specialty greases used in automotive and aerospace production processes, steel manufacturing, and various other applications. It also provides metal finishing compounds to prepare metal surfaces for special treatments, such as galvanizing and tin plating, as well as to prepare metal for further processing; forming compounds used to facilitate the drawing and extrusion of metal products; chemical milling maskants for the aerospace industry; and temporary and permanent coatings for metal and concrete products. In addition, the company offers construction products comprising flexible sealants and protective coatings for various applications; bio-lubricants used in machinery in forestry and construction industries; and die casting lubricants, as well as provides chemical management services. It serves steel, aluminum, automotive, mining, aerospace, tube and pipe, cans, and other industries. 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 Analysis2020/01/17 23:44
    End of Day Share Price2020/01/17 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    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.