AdvanSix Inc.’s ASIX stock looks promising at the moment. With improving nylon demand fundamentals, solid financial health and rising earnings estimates, ASIX presents a compelling investment case. Its cheap valuation and healthy dividend yield are other positives.
We are positive on the company’s prospects and believe that the time is right for you to add the stock to the portfolio as it is poised to carry the momentum ahead.
Let's see what makes ASIX stock an attractive investment option at the moment.
ASIX’s FY25 Earnings Estimates Northbound
Earnings estimates for ASIX for 2025 have been going up over the past 60 days, reflecting analysts’ optimism. The Zacks Consensus Estimate for 2025 has increased by 2.8%.
ASIX’s Positive Earnings Surprise History
AdvanSix has outpaced the Zacks Consensus Estimate in three of the trailing four quarters while missed once. In this time frame, it has delivered an earnings surprise of roughly 18.9%, on average.
AdvanSix’s Valuation Looks Attractive
ASIX’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential. Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, ASIX is currently trading at a trailing 12-month EV/EBITDA multiple of 6.74, cheaper compared with the industry average of 20.1.
ASIX Gains on Improving Nylon Demand & Favorable Prices
AdvanSix, which produces nylon 6 resin, chemical intermediates and ammonium sulfate fertilizer, is benefiting from its differentiated product portfolio, exposure to diverse end markets and favorable demand and pricing. It is expected to gain from improved nylon demand conditions and the growth of its differentiated products. The favorable agricultural industry fundamentals also bode well for ammonium sulfate.
ASIX delivered top and bottom-line growth and cash flow improvement in the third quarter of 2024 on the back of higher year-over-year pricing, improved North American nylon industry conditions and a constructive global acetone supply and demand environment. ASIX sees global acetone supply and demand to remain balanced to tight. North American nylon industry spreads are expected to modestly improve amid stable end-market demand.
Sound Financial Health Bodes Well for AdvanSix Stock
ASIX has a healthy balance sheet and generates substantial cash flows, which allows it to drive shareholder value and fund growth initiatives. The company ended the third quarter of 2024 with cash and cash equivalents of roughly $17.3 million. Operating cash flow climbed around 175% year over year to $57.3 million while free cash flow increased by $31.1 million from the prior-year quarter to $26.8 million.
ASIX offers a healthy dividend yield of 2.3% (above the S&P 500′s average dividend yield of roughly 2%) at the current stock price. It has a five-year annualized dividend growth rate of 37.4%. The company's dividend is perceived to be safe and reliable, backed by strong cash flows and sound financial health.
AdvanSix Price and Consensus
AdvanSix price-consensus-chart | AdvanSix Quote
ASIX’s Zacks Rank & Other Key Picks
ASIX currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, ICL Group Ltd ICL and Gold Royalty Corp. GROY. While CRS sports a Zacks Rank #1 (Strong Buy), ICL and GROY carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. CRS’ shares have soared 150% in the past year.
The Zacks Consensus Estimate for ICL Group’s current-year earnings has increased by 2.9% in the past 60 days. ICL beat the consensus estimate in each of the last four quarters with the average surprise being 18.1%.
Gold Royalty beat the consensus estimate in three of the trailing four quarters while delivering in-line results on the other occasion. In this time frame, it has delivered an earnings surprise of roughly 125%, on average. GROY has an expected earnings growth rate of 66.7% for the current year.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential.
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
ICL Group Ltd. (ICL) : Free Stock Analysis Report
AdvanSix (ASIX) : Free Stock Analysis Report
Gold Royalty Corp. (GROY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
