SLVYY - Solvay: Trading At A 10% Free Cash Flow Yield With Further Growth
2025-02-05 07:00:00 ET
Summary
- Solvay's restructuring expenses are temporary, and its robust cash flow and dividend yield make it attractive for both capital gains and income.
- The company reported strong 9M 2024 results with an underlying free cash flow per share of 2.88 EUR, despite higher Q4 capex expectations.
- Solvay aims for 300M EUR in annual cost savings by 2028, boosting EPS to around 4.5-4.7 EUR per share, with mid single-digit EBITDA growth.
- With a fair value estimate of 50 EUR per share by 2028 and a dividend yield potentially exceeding 10%, Solvay offers excellent income and growth potential.
Introduction
Solvay ( SVYSF ) ( SLVYY ) is a Belgian company focusing on the chemical sector. At the end of 2023, the old chemical conglomerate was split in two, with Syensqo being the division with the specialty materials , while Solvay ‘carried on the legacy’ with a very specific focus on soda ash production and distribution. Since the company has been split, Solvay has been facing some (non-recurring) restructuring expenses which should decrease in the coming years. I think the company is not sufficiently attractive to warrant a long position, as I’m pursuing a combination of capital gains as well as a dividend income with this stock....
Solvay: Trading At A 10% Free Cash Flow Yield With Further Growth