International Flavors & Fragrances

Methodology

International Flavors & Fragrances' specialty ingredients business generates relatively stable earnings from fragrance, flavor, and biosciences products sold to consumer goods companies. The DuPont Nutrition merger significantly expanded scale. This calculation is complicated by integration costs and portfolio complexity—normalized assumptions about synergy realization and sustainable margins provide better baselines than transition periods.

Methodology

IFF often shows moderate PEG ratios reflecting integration execution concerns and the mature nature of flavors and fragrances markets. The company's technical capabilities and customer relationships provide stability. Compare to other specialty chemical companies to assess whether IFF's innovation in natural ingredients and health-focused solutions justify valuations despite integration challenges.

Methodology

IFF pays a meaningful dividend reflecting cash generation from specialty ingredients, though the company prioritizes debt reduction post-merger. Management balances dividends with deleveraging from the DuPont Nutrition acquisition. PEGY is relevant for income investors, though dividend growth will be constrained until debt targets are achieved.