Croda International (LSE: CRDA) is not exactly the name of the household. But FTSE 100 Every year, the company has increased the dividend for 30 years, and the shares are currently extremely low-cost.

In addition, the company’s competitive position is extremely mighty. So is it an opportunity for investors to be greedy when others are afraid?

Chemicals

Croda is a chemical company. It creates specialized products that lend a hand pesticides adhere to crops, cosmetics result on the skin, and pharmaceutical drugs reach the right part of the body.

The company’s products are extremely arduous to compete. In many cases, they are protected by patents that make any other companies copy them.

In the case of Lipida pharmaceuticals, CRODA is often determined as part of the drug approval program. This makes them regulatory and impossible to replace them.

Considering this, the competition is not high. The reason why the actions have recently fallen are problems on the side of demand.

Challenges

One of the main challenges faced by Croda is the situation in the USA. The current administration exerts pressure on pharmaceutical companies, which may charge the demand for its products.

In general, the end markets that Croda sells can be highly cyclical. This may be a good thing – the demand from the pharmaceutical sector increased during the pandemic – but it can also be a risk.

For example, the prices of goods in the agriculture sector were low, which led to lower expenses from farmers. But this should be a cyclical problem that I expect to improve over time.

In addition, reserve levels in consumer care products are high as a result of severe prior demand. Again, however, I think it will finally wear out.

Dividends

I think that business CRODA should pick up, but the most essential question is when. One of the attractive things in a mighty dividend record of the company is, however, earning investors for waiting.

At least yes, while the company continues to escalate its distributions each year. But there is something that investors should pay attention to here.

In 2024, Croda generated 142 million pounds of free cash and returned 152 million GBP to shareholders. This may not be an immediate problem – the company previously managed the crisis – but it cannot last forever.

In other words, the company needs a business to pick up in a relatively near future. This can happen, but it is not guaranteed.

Periodicity

I had an eye on the cross for some time. The combination of a mighty competitive position and impressive achievement of dividend growth is one that I considered attractive.

A cyclical slowdown is not the end of the world – the company has seen many of them over the past three decades. But everything begins to be in terms of the distribution of company shareholders.

Considering ongoing challenges, I think that the shares are probably at the right price. It can be a very good investment, but it is a slightly greater risk than I am looking for now.