CC (Chemours Co): The Dupont Spin Off
In 2015, Dupont spun off its performance chemicals business and that is how The Chemours Company (CC) was formed. CC assumed all liabilities arising from the lawsuits against Dupont.
With its legacy going back to almost 200 years, its product portfolio ranges in different industries e.g., automotive, paints, construction, energy and many more. The Chemours Company (CC) proudly presents itself as a different kind of Chemistry Company which aims to cater to the global middle class which is projected to reach 4.9 billion by 2030 from current level of 2 billion people.
The product range of Chemours Company is broad and caters to various industries. It also has a variety of product offerings that aid in the fight against the climate change. With the Biden administrations focus back on the climate change, Chemours company may benefit out of the renewed focus on this.
Fundamentals and Financials
The Chemours company (CC) has almost moved up 4 times in the last year when it moved from the lowest level of $7.26 USD in April 2020 to reach more than$ 30 USD in April 2021. However, the stock has gone down significantly prior to this period to reach the lowest level in 2020 from the peak of 2017 when it reached close to 60 USD.
With a market cap of approximately $5B USD it is one of the small cap companies in the stock market. The recent up move has attracted several potential investors to bring this stock into their consideration set in the specialty chemicals space.
The Chemours Company (CC) has been a consistent dividend paying company since it is inception. With dividend yield of approximately 3.32% it is one of the best and consistent dividends paying companies in the stock market.
The P/E for the stock is 22.82 in the trailing 12 months period however the most promising thing is the forward P/E which is projected to be 8.73 as per Yahoo Finance. This indicates a significant upside possible for the stock as the re rating happens in the stock. The operating margin of 9.58% is decent enough for any stock in the performance chemicals industry.
The revenue in the trailing twelve months is 4.97B is exceptional for a company with market cap of approximately 5B USD. However, the concerning fact is the total debt of the company which stands at 4.28B USD. At the same time the company has total cash of 1.1B USD in the balance sheet.
As the market starts to focus on the companies with good fundamentals and broadens into the non tech companies, investor interest is going to shift to companies like The Chemours Company (CC). At the same time the dividend yield provides the cushion to any investor during the tough times in the stock market.
Hence for anyone planning to focus on the non tech sector and who bets on the reopening of the economy, they can consider investing in this stock for medium term for potential of good return on investment.
At the same time be cognizant of the total debt of the company and in case of delay of the reopening of the economy there must be stop loss triggered considering the macro economic conditions.