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Highlights
- Treatt announced an interim dividend of 2.00 pence per share for H1 2021 ended 31 March 2021, an increase of 8.7% year-on-year.
- Elementis’ profit before tax was $40 million in H1 2021, up from $28 million in H1 2020, representing an increase of 41% year-on-year.
Chemicals are used across a range of industries, including construction, manufacturing, consumer goods, medicine, electronics and packaging, among others. The chemicals industry forms the core of the manufacturing, production, and industrial boom. It is also an important source of innovation, and many players offer a steady return in the form of dividends to shareholders. However, the health of chemical stocks is mainly dependent on economic conditions, and therefore, long-term income investors must seek chemical stocks that belong to established companies.
(Data source: EODHD/Others)
Here is a review of the investment potential in two FTSE chemical stocks – Treatt & Elementis
Treatt Plc (LON: TET)
Treatt is a manufacturer and supplier of components and speciality chemicals to beverage, flavour, fragrance, as well as consumer products companies. In February 2021, it collaborated with Siemens for the construction of a digital factory at Suffolk.
The shares of Treatt currently trade at GBX 1,010.00, up by 4.99% at 12:33 PM BST on 28 September 2021.
Treatt’s revenues rose by 13.5% year-on-year to £60.8 million in H1 2021 from £53.6 million in H1 2020. Its profit before tax reached £10.4 million, representing an increase of 71.4% year-on-year from £6.1 million in H1 2020.
Treatt’s board announced an interim dividend of 2.00 pence per share for H1 2021 ended 31 March 2021, an increase of 8.7% from 1.84 pence in H1 2020.
The market cap of Treatt stands at £573.79 million, and it returned 61.03% to shareholders in the last one year, as of 28 September 2021.
Elementis Plc (LON:ELM)
Elementis is a speciality chemicals and personal care company based in the UK. Improved industrial demand and customer restocking drove up the company’s revenues by 17% year-on-year to $452 million compared to $387 million in H1 2020.
Its profit before tax was $40 million in H1 2021, up from $28 million in H1 2020, representing an increase of 41% year-on-year.
The shares of Elementis currently trade at GBX 150.60, down by 2.40% at 12:36 PM BST on 28 September 2021. The market cap of Elementis stands at £897.60 million, and it returned 103.51% to shareholders in the last one year, as of 28 September 2021.
Bottomline
The highly cyclical nature of the chemical industry makes it necessary for investors keen on investing in these stocks to consider stocks of established companies, which have high growth prospects.
