Stock worth Buying: Neenah Paper - Analyst Blog
28 Marzo 2014 - 8:00PM
Zacks
Zacks Investment Research upgraded
Neenah Paper, Inc. (NP) to a Zacks Rank #1 (Strong
Buy) on Mar 28, 2014. Going by the Zacks model, companies holding a
Zacks Rank #1 have strong chances of performing better than the
broader market.
Why the
Upgrade?
Market sentiments are favoring Neenah Paper—as evidenced by the
11.8% increase in share price—since the company released its
fourth-quarter 2013 results on Feb 18. Earnings per share from
continuing operations in the quarter were 78 cents, surpassing the
Zacks Consensus Estimate of 56 cents by 39.3%. Also, the net result
was above the year-over-year earnings per share of 60 cents.
Revenues in the quarter increased 6% year over year to $204.9
million. The improvement was driven by 4.1% and 9.8% revenue growth
recorded in the Technical Products and Fine Paper segments
respectively. However, revenues from the Other segment declined
7.5% year over year. Gross margin increased 100 basis points year
over year to 20.6%.
Neenah Paper also remains focused on rewarding its shareholders
well through dividend payments. The company has increased its
quarterly dividend rate for first-quarter 2014 by 20% to 24 cents
from the earlier 20 cents.
Fourth-quarter 2013 results as well as the increased dividend rate
triggered upward revisions in earnings estimates for Neenah Paper.
In the last 60 days, the Zacks Consensus Estimate has increased
6.5% to $3.28 for 2014 and by 9.4% to $3.94 for 2015. The estimate
also reflects year-over-year growth of 12.0% and 20.1% for 2014 and
2015 respectively. Earnings growth for the next 5 years is
predicted to be 10.0%.
Solid earnings growth rates as well as a positive average earnings
surprise of 10.2% have made us optimistic of a better performance
ahead by Neenah Paper.
Other Stocks to Consider
Neenah Paper is an $822 million company operating in the paper and
related products industry. Other stocks worth considering in the
industry include Resolute Forest Products Inc.
(RFP), Stora Enso Oyj (SEOAY) and
UPM-Kymmene Oyj (UPMKY), all of which carry the
same rank as Neenah Paper.
NEENAH PAPER (NP): Free Stock Analysis Report
RESOLUTE FOREST (RFP): Free Stock Analysis Report
STORA ENSO -ADR (SEOAY): Get Free Report
UPM-KYMMENE ADR (UPMKY): Get Free Report
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