Forgotten FTSE 100 hero Croda Worldwide (LSE: CRDA) has staged a outstanding comeback, leaping 18% during the last month. 

That’s a long-awaited reversal after a dire run of kind. Nevertheless, regardless of that surge, the Croda share price remains to be down 35% over 12 months and 54% over three years.

Its fall from grace and potential to rise once more intrigued me. I reviewed the inventory in January, twice in February, and once more in March.

Croda was as soon as a shining star, supplying high-performance chemical substances utilized in the whole lot from solar lotions to vaccines. 

It was a giant pandemic winner. Demand for its lipids soared as vaccine makers stocked up. However when Covid handed, clients had an excessive amount of stock. 

Croda’s board described the next destocking course of as “prolonged”. Lengthy-suffering shareholders could have earthier phrases for it.

Outcomes begin to flip

But, via all of it, Croda has continued doing one factor brilliantly. It has elevated its dividend each single yr since 1991.

Since 2008 the abnormal dividend has grown by a mean of 12% a yr. That form of file earns the inventory dividend celebrity standing, at the least in my e-book.

I noticed its potential, however I didn’t purchase. Regardless of its troubles, Croda wasn’t precisely in deep-value territory, with a price-to-earnings ratio of just about 23, nicely above the FTSE 100 common of round 16.

The yield was modest, beneath 2%, and dividend progress had slowed. Extra importantly, I felt it hadn’t but hit restoration pace.

That’s modified. On 23 April, Croda reported an 8% rise in Q1 gross sales to £442m. All three enterprise items grew, with client care up 8% to £255m and life sciences up 10% to £134m. 

The board stored its full-year revenue outlook intact. Then Donald Trump gave it one other raise.

A temper shift in markets

With Trump rolling again on his tariff threats and placing a commerce cope with the UK, FTSE 100 shares have climbed nearly throughout the board. Croda has been one of many greatest movers.

It’s nonetheless dear, buying and selling on a P/E of twenty-two, however the yield has crept up to three.5%. The 14 analysts with one-year forecasts have a median goal of three,777p. That’s simply over 20% above right this moment’s price. Factoring within the yield, that may ship a 15% complete return.

That implies there may be scope for progress, however as ever, no ensures.

Dividend is dependent upon money

This worries me. In 2024, Croda paid out extra in dividends than it generated in free money. Some will see that as an indication of the board’s dedication to rewarding shareholders. Others could fear it means the money isn’t there.

Of 16 analysts overlaying the inventory, six name it a Sturdy Purchase. Eight say Maintain. Just one says Promote. 

After the newest surge, there’s an opportunity that markets could pause for breath, and Croda would possibly give up a few of its positive aspects. 

Traders contemplating shopping for this inventory ought to watch fastidiously, to see if the final month was a knee-jerk response to Trump or the beginning of one thing extra enduring.

Croda could attraction to those that worth regular, long-term dividend progress over chasing the very best yield right this moment. One factor hasn’t modified. I nonetheless can’t get excited sufficient to purchase it myself.