Is DuPont a Good Stock to Buy?

We can also compare DuPont to smaller diversified chemical companies Eastman Chemical Company (NYSE:EMN) and FMC Corp (NYSE:FMC). The trailing earnings multiples here are 24 and 19, respectively, with the sell-side again laying out an earnings trajectory that brings the forward P/Es considerably lower. At these two companies, however, sales numbers have been quite good: in the fourth quarter of 2012, Eastman grew its revenues by over 20% versus a year earlier while FMC improved its top line results by 10% (and grew its net margins as well). So at first glance it seems more likely to use that these companies will meet the high expectations of Wall Street analysts, and as such if an investor does want to buy into the optimistic take on the industry they might be better places to start a deeper analysis.

DuPont and Dow look speculative to us: any value case depends on the companies delivering considerably better earnings in 2014 than in 2012. The other peers which we looked at here have much gentler expectations, and their financials have been showing considerably better results as well; therefore we at least at this point would consider them better prospects for a value portfolio.

Disclosure: I own no shares of any stocks mentioned in this article.