Summary
Celanese is benefiting from a strong market for acetyl products.
The free cash flow yield has now entered the double digit territory.
Celanese is in an unique position to hike the dividend, repurchase a meaningful amount of stock and strengthen the balance sheet.
You can do a lot of things with in excess of $1B in free cash flow per year.
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Introduction
The recent weakness on the financial markets has created some opportunities. As I explained in my previous articles on Wacker Chemie and BASF, the chemical sector has been hit particularly hard, as investors are bracing for an economic slowdown. Celanese’s (CE) share price is actually going against the trend. Sure, the share price has come off the recent all-time highs, but it looks like the stock is much more resilient compared to the other chemical (and specialty materials) companies out there.
Celanese has always been a free cash flow monster, and although the share price is currently trading just 40% higher than when I previously discussed the company in 2015,
