The Lubrizol Corporation (LZ) has seen its stock hitting 52-week highs in recent sessions, but it’s still an attractive value stock as earnings have been rising. LZ has a forward P/E of just 11.33.
Lubrizol manufactures specialty chemcials including lubricant additives for engine oils and fuel additives for gaoline and diesel fuel. It also makes ingredients and additives for personal care products and pharmaceuticals, plastics technology and performance coatings.
Raised 2009 Guidance on Sep 14
Lubrizol raised full-year guidance well-ahead of its Oct 29 third-quarter earnings report to the range of $6.10 to $6.40 from a prior range of $5.70 to $6.00 per share it issued on July 30.
Analysts are bullish and have been raising estimates as the earnings date approaches.
All 7 covering analysts raised 2009 estimates to $6.35 from $5.96 in the last 30 days. For the third quarter, the Zacks Consensus Estimate has jumped 7 cents in the last week as 2 out of 7 analysts have raised in that time period.
The surprise history for Lubrizol is somewhat misleading as it shows them meeting estimates in the second quarter when, in fact, the company pre-announced far better than expected earnings for the quarter which gave the analysts time to raise their estimates to meet the number.
In the second quarter results, the company still saw year over year volume declines but quarter over quarter both revenues and volumes increased. Analysts are betting that that trend continues into the third quarter.
Lubrizol is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of 2.74. The company has a stellar 5-year average return on equity (ROE) of 18.88%. As an added bonus, Lubrizol also pays a dividend with a yield of 2.00%.
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