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Here's Why You Should Add DuPont (DD) to Your Portfolio Now

Shares of DuPont de Nemours, Inc. DD have gained 20.2% over the past three months, outperforming its industry’s rise of 8.6% over the same time frame. It is benefiting from strong end-market demand, cost-management actions and innovation-driven investment.

We are positive on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.

 

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Let’s take a look into the factors that make this Zacks Rank #2 (Buy) stock an attractive choice for investors right now.

Healthy Growth Prospects

The Zacks Consensus Estimate for earnings for 2021 for DuPont is currently pegged at $4.22, reflecting an expected year-over-year growth of 25.6%. Earnings are also expected to register a 6.3% growth in the fourth quarter of 2021. The company also has an expected long-term earnings per share growth rate of 10.8%.

Impressive Earnings Surprise History

DuPont has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of 9.2%, on average.

Capital Allocation

The company remains focused on driving cash flow and shareholder value. It looks to boost cash flow through working capital productivity and earnings growth. It returned $657 million to shareholders through share repurchases and dividends during the third quarter of 2021. DuPont’s board, last year, also authorized a new $1.5 billion share buyback program. It expects to return roughly $640 million in dividends for full-year 2021.

Growth Drivers in Place

DuPont is gaining from strong demand across electronics, automotive, construction and water end-markets and sustained improvement in global industrial end-markets, which is driving its top line. It is seeing sustained strength in semiconductors and smartphone technologies. The company, in its third-quarter call, said that it expects strong demand trends to continue across almost all end-markets in the fourth quarter.  

The company also remains focused on driving growth though innovation and new product development. Its innovation-driven investment is focused on several high-growth areas. It remains committed to drive returns from its R&D investment. It is also benefiting from cost synergy savings and productivity improvement actions. Its structural cost actions are contributing to its bottom line.

DuPont also continues to implement strategic price increases in the wake of rising raw material costs. These actions are likely to support its results in the fourth quarter.

In Nov 2021, the company agreed to acquire Rogers Corporation is a deal worth $5.2 billion. The acquisition will expand the company’s foothold in high-growth secular end-markets, including electric vehicles, advanced driver assistance systems, 5G telecommunications and clean energy, and provide significant cost synergy opportunities. The buyout, which builds on DuPont’s recent acquisition of Laird Performance Materials, will further bolster its position as the leading electronic solutions provider in the industry. The company expects to realize around $115 million in run-rate cost synergies (pre-tax) by the end of 2023.

DuPont expects the acquisition to be accretive to its top line, operating EBITDA, free cash flow and adjusted EPS on its completion. Following the transaction closure, Rogers will be integrated into DuPont’s Electronics & Industrial business segment.

Stocks to Consider

Other top-ranked stocks worth considering in the basic materials space include Commercial Metals Company CMC, Albemarle Corporation ALB and AdvanSix Inc. ASIX.
 
Commercial Metals, sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 10.5% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 6.6% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 7.4%, on average. CMC has rallied around 57% in a year.

Albemarle, carrying a Zacks Rank #2, has an expected earnings growth rate of 49.8% for the current year. ALB's consensus estimate for the current year has been revised 4% upward over the past 60 days.

Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB shares have popped around 24% in a year.

AdvanSix, carrying a Zacks Rank #2, has an expected earnings growth rate of 3.9% for the current year. The Zacks Consensus Estimate for ASIX’s earnings for the current year has been revised 1.6% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 98% in a year.


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DuPont de Nemours, Inc. (DD): Free Stock Analysis Report
 
Albemarle Corporation (ALB): Free Stock Analysis Report
 
Commercial Metals Company (CMC): Free Stock Analysis Report
 
AdvanSix (ASIX): Free Stock Analysis Report
 
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