Albemarle (ALB) Shares Reach New 52-Week High At $82.37

Shares of Albemarle (NYSE:ALB) touched a fresh 52-week high of $82.37 yesterday, before retracing to end the day at $81.21.

Albemarle, which has a market cap of roughly $9.1 billion, has delivered a healthy year-to-date return of around 45.5%, much higher than the S&P 500’s corresponding return of roughly 4.7%. Average volume of shares traded over the last three months is approximately 1,389.4K.

Driving Factors

Shares of Albemarle are on the rise following its forecast-topping first-quarter 2016 results, reported last month. The company saw its profits jump in the quarter, aided by sizable gains on sale of businesses. The chemical maker logged profit of $228.2 million or $2.02 per share for the quarter, a more than five-fold surge from the year-ago profit of $43.1 million or 40 cents per share.

Adjusted earnings of $1.12 per share topped the Zacks Consensus Estimate of 85 cents. Sales fell roughly 2% year over year to $865.4 million, but surpassed the Zacks Consensus Estimate of $836 million.

In its first-quarter call, the company stated that it remains committed to deliver growth in its core businesses and increase free cash flows on a year over year basis in 2016. The company raised its guidance for 2016 based on strong first-quarter results and expectations for continued growth in most of its businesses.

Adjusted earnings for 2016 are now expected to be between $3.90 and $4.25 per share, up from the earlier view of $3.45 and $3.80 per share. Net sales are expected to be between $3.3 billion and $3.6 billion, also up from the prior view of $3.2 billion and $3.4 billion.

Albemarle is a premier specialty chemicals company with leading positions in attractive end markets globally. The company is selling non-core businesses and assets to boost growth opportunities and focus on its key businesses.

In Feb 2016, Albemarle wrapped up the sale of its mineral flame retardants and specialty chemicals businesses to Huber Engineered Materials – a division of leading global manufacturer of flame retardant additives, J.M. Huber Corporation.

Also, in Jan 2016, the company completed the divestiture of the tribotecc metal sulfides business to Treibacher Industrie AG, a leading player in the chemistry and metallurgy sectors. The divestment advances Albemarle's strategic plan of focusing on its core bromine, lithium, catalysts and surface treatment businesses.

Albemarle also remains committed to deliver incremental returns to shareholders, leveraging healthy cash flows. The company raised its quarterly dividend by 5% to 30.5 cents per share in Feb 2016. The hike represents the 22nd straight year of dividend increase by the company. Albemarle’s operating cash flows for the first quarter surged nearly four-fold year over year to around $172.7 million.

Albemarle currently sports a Zacks Rank #1 (Strong Buy).

Other Stocks to Consider

Other well-placed companies in the chemical space with the same rank include BASF SE (OTC:BASFY) , Asahi Kasei Corp. (OTC:AHKSY) and Innospec Inc. (NASDAQ:IOSP) .