Celanese debt trend
At the end of the second quarter of 2018, Celanese (CE) reported debt of ~$.3.6 billion. Its debt remained stable at ~$3 billion between 2012 and 2016. However, at the end of 2017, Celanese raised 300 million euros to fund its qualified US pension plans. As a result, CE’s debt is at its highest level in more than six years.
Since 2012, CE’s debt has grown at a CAGR (compound annual growth rate) of 2.75%. Although that debt growth rate is nominal, we’ll see how it has impacted CE’s DE (debt-to-equity) ratio.
Celanese’s debt-to-equity ratio
The latest report from the second quarter of 2018 indicates that Celanese’s DE ratio was 1.06x, which is marginally higher than the industry average of 0.98x. In comparison, its peers LyondellBasell (LYB), Westlake Chemical (WLK), and Eastman Chemical (EMN) have DE ratios of 0.81x, 0.50x, and 1.2x, respectively. That indicates that Celanese has the highest DE ratio among its peers with the exception of Eastman Chemical.
Although Celanese’s DE ratio is marginally above the industry standard, it may not bother investors much. However, we should see whether Celanese can service its debts easily.
In the next part, we’ll look at Celanese’s free cash flows and its ability to service its debt.
Investors can indirectly hold Celanese by investing in the Invesco DWA Basic Materials Momentum ETF (PYZ), which has invested 2.9% of its portfolio in Celanese.
The latest short interest report on August 31 indicates that Celanese's (CE) short interest is at the lowest point since the beginning of 2018.
Verizon Communications stock (VZ) closed down 2.09% on Tuesday after the leading US mobile carrier reported mixed results for the first quarter of 2019 before the market bell yesterday.
Several European auto companies want Nokia’s (NOK) patent business subjected to an antitrust probe.
The first-quarter semiconductor earnings season has begun, and the stock market is showing bullish sentiment as investors buy ahead of earnings releases.
Netflix (NFLX) is working its way through a series of price increases in several markets, including the United States and parts of Europe.
Netflix (NFLX) is aiming to add 14.6 million paying subscribers in the first six months of 2019.
Earlier today, the second-largest US automaker, Ford Motor Company (F), announced a plan to invest $500 million in Plymouth-based automotive company Rivian.