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DuPont de Nemours is a world-renowned specialty chemicals company with a history spanning over 200 years and an ever-evolving portfolio. In the current iteration, DuPont is the specialty chemicals company created in 2019 from the DowDuPont merger and subsequent separations.

Since being spun off from DowDuPont, DuPont divested its nutrition and biosciences business in early 2021. The company plans to divest the majority of its mobility and materials business. Roughly 70% of the business will be sold to Celanese for a purchase price of $11 billion. DuPont plans to divest an additional 10% in a second transaction that is still underway. The divestiture to Celanese should close by the end of 2022. As a result, DuPont will have two segments based on products and end markets.

DuPont has produced some noteworthy (and high-profit) products over the years. The water and protection segment invented products such as Kevlar, which has wide applications in textiles, safety equipment, and transportation. Tyvek, broadly used in construction materials, also demonstrates DuPont's successful product development. The company has a solid record of innovation, and together with new products it will be able to replace earnings as older products fall out of favor.

The electronics and industrial segment (over 55% of 2022 pro forma EBITDA including acquisitions and excluding divestitures) sells electronic materials, including components for semiconductors. This will grow as a share of total profits after the acquisition of Laird performance materials in 2021 and the planned acquisition of Rogers in 2022. This business should benefit from the continued growth in semiconductors and a rise in interconnectivity of devices, which will require more electronic components in smartphones, computers, automobiles, and consumer appliances.

The water and protection segment (nearly 40%) sells products used for safety, construction, and water management and purification. DuPont should benefit from the rise in U.S. housing starts. The water business should see demand growth from rising water costs that require increased water recycling technologies as well as the increased need to for water filtration.

Opportunities:

• DuPont's specialty chemicals business is among the best in the world, developing products such as Kevlar and Tyvek that command pricing power and generate healthy profit margins.
• The electronics and industrial business is well positioned to increase profits as a result of growing demand for semiconductors and increased connectivity from 5G and Internet of Things technologies.
• The DowDuPont merger, subsequent separations, and DuPont's divestiture of its nutrition and biosciences business created value for shareholders. As a result, DuPont is well positioned for long-term profit growth.