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Highest Debt to EBITDA Ratio in the Diversified Chemicals Industry Detected for Ashland (ASH, PENX, EMN)

Published on Tue, 01/22/2013 - 11:22
By Mallory Stone

Below are the three companies in the Diversified Chemicals industry with the highest debt to EBITDA ratios. This ratio indicates how many years of EBITDA would be necessary in order to pay back all the debt (assuming Debt and EBITDA are constant). Typically, this ratio is considered to be alarming when it is greater than 3.0 but this can vary and should be looked at within the context of the industry.

Ashland (NYSE:ASH) is highest with a debt to EBITDA ratio of 5.3. Operating in over 100 countries, Ashland Inc. provides the specialty chemicals, technologies and insights to help customers create new and improved products for today and sustainable solutions for tomorrow. Ashland's chemistry is at work every day in a wide variety of markets and applications, including architectural coatings, automotive, construction, energy, personal care, pharmaceutical, tissue and towel, and water treatment. Thus far today, Ashland has traded 69,000 shares, vs. average volume of 732,000 shares per day. The stock has outperformed the Dow (0.4% to the Dow's 0.0%) and outperformed the S&P 500 (0.4% to the S&P's -0.2%) during today's trading.

Penford (NASDAQ:PENX) is next with a debt to EBITDA ratio of 3.8.

Finishing up the top three is Eastman Chemical (NYSE:EMN), with a debt to EBITDA ratio of 3.7.

By Mallory Stone