The Company in a Nutshell
- Chemtrade is definitely not a candidate for DSR portfolios.
- The company faces too many challenges for its very limited cash flow.
- There is no dividend growth and dividend payment is at risk.
- We do not cover Chemtrade Logistics Income Fund at the moment.
Date Reviewed | N/A |
Company Name | Chemtrade Logistics Income Fund |
Symbol | CHE.UN.TO |
Sector | Materials |
Industry | Chemicals |
Beta | 1.497 |
PRO Rating | 2 |
Dividend Safety | 2 |
Business Model
Chemtrade Logistics Income Fund is a Canada-based company that operates a diversified business providing industrial chemicals and services to customers in North America and around the world. The Company's segments include Sulphur and Water Chemicals (SWC), and Electrochemicals (EC). SWC segment markets, removes and/or produces merchant, Regen and sulphuric acid, sodium hydrosulphite, elemental sulphur, liquid sulphur dioxide, hydrogen sulphide, sodium bisulphite, and sulphides, and provides other processing services. This segment also manufactures and markets a variety of inorganic coagulants used in water treatment, including aluminum sulphate, and a number of specialty chemicals, including sodium nitrite. EC segment manufactures and markets sodium chlorate and chlor-alkali products including caustic soda, chlorine and HCl, largely for the pulp and paper, oil and gas and water treatment industries. These products are marketed primarily to North American and South American customers.
Current price | 10.5 |
ROE | 39.15 % |
ROIC | 14.35 % |
Shareholder Yield | 0.65 % |
5-Yr Total Return | 38.85 % |
1-Yr Total Return | 37.30 % |
Next Earnings Date | 11-12-24 |
Latest Quarter Information
What the CEO said:
We started the new year on great footing with respect to both our operational performance and our financial performance. Adjusted EBITDA in the first quarter was above our internal expectations, with strong execution in both of our operating segments helping to support profitability. Our water solutions portfolio remained a standout performer in our Sulphur and Water Chemicals (SWC) segment, continuing to benefit from the investments we have made in this business line in recent years. Meanwhile, continued solid pricing and demand for HCl and chlorine helped to offset a portion of the impact from materially lower caustic soda index pricing.
What we say:
06-19-2024, Chemtrade's Q1 revenues decreased by ~11%, driven by lower selling prices for caustic soda, merchant acid, and Regen acid, and lower selling prices and volumes for sodium nitrite, and AEBITDA totaled ~$110M, -16.5% Y/Y, due to lower revenues. It, however, witnessed improved margins for several products. Revenue declined by 12% in SWC ($230.6M) and ~10% in the EC ($187.6M) segment in Q1. Cash flows from operating activities was $2.4M, ~-95% YoY, and distributable cash was ~$60M, -31.6% YoY in Q1. Chemtrade gave its 2024 AEBITDA guidance at the higher end of $395M-$435M. It increased monthly distribution by 10% and intends to implement an NCIB to buy back its units.
Investment Thesis
Dividend Triangle
5-Yr Rev. Growth | 2.95 % |
5-Yr EPS Growth | 0.00 % |
5-Yr Div Growth | -12.95 % |
Potential Risks
Debt/Equity | 1.20 |
Financial Debt to EBITDA (TTM) | 2.10 |
Current Ratio (Quarterly) | 0.80 |
Credit Score | 67 |
Dividend Growth Perspective
Dividend ($) | 0.66 |
Dividend Yield Fwd | 6.30 % |
Dividend Frequency | Monthly |
Average 5-Yr Yield | 8.05 % |
Payout Ratio (%) | 28.15 |
Cash Payout Ratio (%) | 44.50 |
DGR 1-Yr | 10.00 |
DGR 3-Yr | -5.00 |
DGR 5-Yr | -12.95 |
DGR Streak | |
Chowder Score | -6.65 |
Next DVD PMT | 10-31-24 |
Valuation
(Data for `ddm_recent_annual_dividend` field are missing to build DDM tables)
Video Tutorial: How to Read the Stock Cards DDM Valuation
Market Cap | 1 B |
PE Ratio | 9.80 |
Fwd PE | 10.60 |
Price to Book Ratio | 1.65 |
DDM Valuation | N/A |
Average 5-Yr PE | 8.48 |
Value Score | 94 |
- All financial metrics are updated weekly.
- The DSR PRO rating and Dividend Safety Score are updated quarterly.
- The analysis (investment thesis, risk potential, dividend growth perspective and DDM calculation) is reviewed every 6 months.
- The PDF format includes only comments (no metrics) and is reviewed every 6 months.