Quaker Chemical Corp (KWR) stock analysis

P/E above its 5-year median

Quaker Chemical's P/E of 27.8 is above its own 5-year median of 27.7.

P/E above the industry

Quaker Chemical's P/E of 27.8 is above the Petroleum Refining and Related Industries median of 14.5.

EV/EBITDA below its 5-year median

Quaker Chemical's EV/EBITDA of 15.2 is below its 5-year median of 26.2.

P/B below the industry

Quaker Chemical's price-to-book of 1.90 is below the Petroleum Refining and Related Industries median of 2.75.

Trading above fair value

The share price of $155.91 is above our fair value estimate of $141.32.

Margin of safety under 20%

The price is 10.3% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -1.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 8.7% over the last twelve months; the Petroleum Refining and Related Industries median is 17.0%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin slipping

Gross margin was 35.8% over the last twelve months, against 35.9% a year earlier.

Return on equity under 15%

Return on equity was 7.0% over the last twelve months and averaged 4.9% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 5.2%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Quaker Chemical's return on equity of 7.0% is below the Petroleum Refining and Related Industries median of 17.7%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 4.8% over the last twelve months, against a 5-year average of 3.6%.

Net margin below the industry

Quaker Chemical's net margin of 4.8% is below the Petroleum Refining and Related Industries median of 5.6%.

High debt

Debt is 63.1% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 67.3% five years ago to 63.1%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 10.6% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 3.8 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 2.47 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.51; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Quaker Chemical paid dividends worth 1.3% of the share price over the last twelve months.

Yield below Treasuries

The 1.3% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Quaker Chemical yields 1.3%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 36.2% of net income.

Covered by free cash flow

Dividends take 89.2% of free cash flow.