Kraton Corporation (NYSE: KRA) and Orion Engineered Carbons S.A (NYSE:OEC) are both small-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, analyst recommendations, profitability, earnings and risk.
Insider & Institutional Ownership
97.8% of Kraton Corporation shares are owned by institutional investors. Comparatively, 37.2% of Orion Engineered Carbons S.A shares are owned by institutional investors. 5.0% of Kraton Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a breakdown of current ratings for Kraton Corporation and Orion Engineered Carbons S.A, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Orion Engineered Carbons S.A||0||1||2||0||2.67|
Orion Engineered Carbons S.A has a consensus price target of $23.33, indicating a potential upside of 9.55%. Given Orion Engineered Carbons S.A’s stronger consensus rating and higher possible upside, analysts clearly believe Orion Engineered Carbons S.A is more favorable than Kraton Corporation.
Valuation & Earnings
This table compares Kraton Corporation and Orion Engineered Carbons S.A’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Kraton Corporation||$1.85 billion||0.53||$338.62 million||$1.38||22.97|
|Orion Engineered Carbons S.A||$1.36 billion||0.93||$268.66 million||$0.85||25.06|
Kraton Corporation has higher revenue and earnings than Orion Engineered Carbons S.A. Kraton Corporation is trading at a lower price-to-earnings ratio than Orion Engineered Carbons S.A, indicating that it is currently the more affordable of the two stocks.
Orion Engineered Carbons S.A pays an annual dividend of $0.75 per share and has a dividend yield of 3.5%. Kraton Corporation does not pay a dividend. Orion Engineered Carbons S.A pays out 88.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Volatility and Risk
Kraton Corporation has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, Orion Engineered Carbons S.A has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.
This table compares Kraton Corporation and Orion Engineered Carbons S.A’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Orion Engineered Carbons S.A||4.12%||148.13%||8.81%|
Kraton Corporation Company Profile
Kraton Corporation, formerly Kraton Performance Polymers, Inc., is a specialty chemicals company. The Company manufactures styrenic block copolymers (SBCs) and other engineered polymers. The Company also produces specialty products primarily derived from pine wood pulping co-products. The Company operates through two segments: Polymer Segment, which comprises SBCs and other engineered polymers business, and Chemical Segment, which comprises pine-based specialty products business. Its SBCs are used in a range of applications, including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing and footwear products. The Company also sells isoprene rubber (IR) and isoprene rubber latex (IRL), which are non-SBC products primarily used in applications, such as medical products, personal care, adhesives, tackifiers, paints and coatings. It offers crude tall oil (CTO) and crude sulfate turpentine (CST).
Orion Engineered Carbons S.A Company Profile
Orion Engineered Carbons S.A. is a producer of carbon black. The Company operates through two segments: Specialty Carbon Black and Rubber Carbon Black. The Specialty Carbon Black segment is engaged in the production of specialty carbon black. The Rubber Carbon Black segment is involved in the production of rubber carbon black. As of December 31, 2016, it operated a diversified carbon black business with over 280 specialty carbon black grades and approximately 80 rubber carbon black grades. Carbon black is used as a pigment and as a performance additive in coatings, polymers, printing and special applications (specialty carbon black), and in the reinforcement of rubber in tires and mechanical rubber goods (rubber carbon black). As of December 31, 2016, it operated a global platform of 13 production facilities in Europe, North and South America, Asia and South Africa and three sales companies, as well as one jointly-owned production plant in Germany.
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