Solvay SA
🇧🇪 SOLB.BR · Brussels · BE0003470755
Materials
EUR 26.70 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
93.9
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 26.70 ÷ 0.28 = 93.9
TTM period through: 2025-12-31
Forward P/E (estimated): 10.4
Based on analyst estimates
Reference: Provider P/E (Trailing): 95.4
Yield (Fwd)
9.10%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 9.09%
Net Debt/EBITDA (TTM)
1.8x
Latest quarter: 8.2x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 8.2x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
854.4%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 846.7%
Cash Flow Payout (TTM): 42.7%
FCF Coverage (TTM): 1.59x
ROE
3.0%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
6.4x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Solvay is a legacy chemicals manufacturer undergoing a major strategic transition following the spin-off of its specialty business. While the attractive 9.1% yield is securely covered by free cash flow and the forward valuation appears cheap, the cyclical nature of its materials business and ongoing structural transitions make it unsuitable for conservative dividend strategies. Better opportunities exist in more stable essential service sectors with predictable cash flows, though existing investors may choose to monitor the fundamental recovery given the strong dividend coverage.
Sector Context
Solvay is a legacy global chemicals manufacturer producing foundational materials like soda ash and derivatives. While its products are essential to many industrial processes, the materials sector is highly cyclical and lacks the predictable, recurring cash flows characteristic of optimal essential service monopolies, making it less suitable for conservative dividend strategies.
Temporary Opportunity Identified
Depressed accounting profitability and recent Q4 net loss driven by weak cyclical soda ash pricing combined with heavy one-off transformation expenses related to the recent Syensqo spin-off.
📊 Strategy Analysis
- • The 9.1% dividend yield is robustly supported by free cash flow, with a conservative cash flow payout ratio of just 42.7%.
- • Forward P/E of 10.4 suggests deep undervaluation once earnings normalize post-restructuring.
- • Balance sheet health is solid with Net Debt/EBITDA at 1.83x, sitting comfortably below the 3.0x caution threshold.
- • The 2024 dividend cut was a prudent, structural rebasement following the Syensqo spin-off, rather than a sign of financial distress.
⚠ What to Watch
- • The materials sector is inherently cyclical, exposing earnings to macroeconomic volatility that conflicts with the need for predictable cash flows required by this dividend strategy.
- • Recent Q4 2025 net loss of €95 million highlights near-term vulnerability to weak commodity pricing, specifically in the soda ash market.
- • Severely inflated TTM P/E of 93.9 reflects depressed accounting profitability driven by ongoing post-spin-off transformation expenses.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-05
Disclaimer: This information is for educational purposes only. Not financial advice.