Our analysis is based on comparing Elementis Plc with the following peers – Kronos Worldwide, Inc., W. R. Grace & Co., Sensient Technologies Corporation and DowDuPont Inc. (KRO-US, GRA-US, SXT-US and DWDP-US).
Elementis Plc’s dividend yield is 4.48 percent and its dividend payout is 111.25 percent. This compares to a peer median dividend yield of 2.66 percent and a payout level of 47.18 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s average dividend quality score of 42 out of a possible score of 100, points to some weakness in the sustainability of its robust payout ratio, and makes its less attractive for dividend investors seeking current income.
Dividend Quality Overview
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 4 were high quality and 1 was medium quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
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Over the last twelve months (prior to June 30, 2017), ELMTY-US paid a medium quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 1.60x), investing cash flow (coverage of -5.19x), issuance cash flow (coverage of 4.80x) and twelve-month prior cash (coverage of 0.74x), for a total dividend coverage of 1.98x.
ELMTY-US’s issuance cash flow includes outflows from net share buybacks (coverage of -0.03x). Thus, the total coverage including share buybacks is 2.01x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||N/A||2.84||3.42||4.54||4.77||4.48|
|Dividend Payout (%)||32.1||54.64||36.89||75.16||111.89||104.27|
A complete list of metrics and analysis is available on the company page.
Elementis Plc is an investment holding company, which engages in the manufacture of specialty chemicals. It operates through the following segments: Specialty Products, Surfactants, and Chromium. The Specialty Products segment produces rheological and other specialty additives, compounded products, and colourants. The Surfactants segment offers surface active chemicals such as household cleaners, paper goods, and oilfield services. The Chromium segment comprises of chromium chemicals for applications in aerospace alloys, timber treatment, and leather production. The company was founded in 1998 and is headquartered in London, the United Kingdom.
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