Quaker rebounds with the economy

Article Excerpt

QUAKER CHEMICAL CORP. $198 is still a buy. The company (New York symbol KWR; Income Portfolio, Manufacturing & Industry sector; Shares outstanding: 18.0 million; Market cap: $3.6 billion; Price-to-sales ratio: 1.9; Dividend yield: 0.9%; TSINetwork Rating: Average; www.quakerhoughton.com) acquired rival specialty chemicals maker Houghton International in August 2019. It paid Houghton’s owners $170.8 million in cash and a 24.5% stake in the combined company. To offset rising costs for raw materials, particularly oil-based chemicals, Quaker has raised its selling prices. That’s mainly why its sales in the quarter ended March 31, 2023, rose 5.5%, to a record $500.1 million from $474.2 million a year earlier. As well, a cost-control plan helped lift earnings before unusual items by 33.1%, to $1.89 a share from $1.42. As the economy re-opens, Quaker’s earnings will probably jump 27% to $7.44 a share. The stock trades at a high 26.6 times that estimate. Even so, that’s an acceptable multiple in light of the company’s high share of its niche markets…