FMC Corp.

The positive outlook on FMC reflects the potential for an upgrade in the next year if it continues to improve EBITDA and, in turn, credit measures to levels that we consider appropriate for a higher rating. We believe the company will utilize its free cash flow generation to fund growth plans and will return cash to shareholders in the form of an increased dividend payout and regular share repurchases under the $1 billion share repurchase program. We would expect the company to grow at a faster pace than GDP growth primarily because of its new product introductions and cross-selling opportunities. As a result of new, higher margin product introductions and essential nature of many of its products to farmers, we

...FMC's growth and profitability are strong, and its EBITDA margins are above average for a specialty chemicals company. The company was able to grow at a faster pace than the overall market, driven by new product introductions and cross selling opportunities. Additionally, the company's strong research and development (R&D) capabilities, synergy capture, and higher margin product portfolio has enabled them to generate stronger margins than others in the crop protection chemicals market, such as Corteva Inc. We believe the company's credit metrics and financial policies will support an investment grade rating. Despite the moderate increase in book debt to fund the asset swap with DuPont, the company had initially prioritized free cash flow for debt reduction. While the company prioritized cash flows for shareholder rewards in 2019, we expect it will maintain a balanced approach to capital deployment going forward. This balance, as well as our expectation for improved EBITDA, should support...

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