International Flavors & Fragrances Inc (IFF), Sensient Technologies Corporation (SXT): Specialty Chemical Companies for You to Buy

Certainly, Sensient Technologies Corporation (NYSE:SXT) is a top choice in terms of its gross and profit margins, as well as financial strength / balance sheet metrics, including current ratio and long-term debt to equity. It is aiming to boost efficiency even more, as well as investing in the expansion of its capabilities.

Sensient Technologies Corporation (NYSE:SXT)’s P/E is 14.7 times forward share earnings, as of this write up. It has price upside from its current quotation. Investors should also be aware of the return of cash to shareholders regularly through repurchases and dividends.

Making strides in housing market through acquisition

A specialty chemical producer I had written a post about earlier this year in reference to the housing market upturn (see: “3 Ways to Play the Housing Recovery “) is RPM International Inc. (NYSE:RPM) , a manufacturer of chemicals for the industrial and consumer end markets. Its industrial unit, contributing nearly two-thirds of total revenue, is primarily composed of maintenance and protection products utilized for a range of construction processes.

The company is performing well behind an improving market for commercial construction products. This is partly thanks to acquisitions, as well, such as the buyout of Viapol, a Brazilian flooring business, earlier this year, in addition to HiChem and Kirker, two consumer-related firms.

Again, this company is marked by a solid gross margin that is gaining ground largely behind new offerings with higher price points. Its share earnings are growing rather rapidly and will probably continue to do so at a double-digit pace, at least in the near term.

The shares are trading at about 17.1 times forward share earnings, and can be considered a growth investment at this juncture. They yield about 2.7% on an annual basis.

A solid group

This may be a good time to add a specialty chemical maker, such as a food/fragrance firm provider, to your holdings. The ones chosen here are largely highlighted by strong gross margins, healthy market share, and activities focused on building presences in higher-growth units.

Damon Churchwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Damon is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Specialty Chemical Companies for You to Buy originally appeared on Fool.com is written by Damon Churchwell.

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