Orion Engineered Carbons S.A (NYSE: OEC) and Innospec (NASDAQ:IOSP) are both small-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, dividends, institutional ownership, profitability and analyst recommendations.
Orion Engineered Carbons S.A pays an annual dividend of $0.75 per share and has a dividend yield of 3.5%. Innospec pays an annual dividend of $0.76 per share and has a dividend yield of 1.4%. 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. Innospec pays out 24.3% of its earnings in the form of a dividend.
Earnings and Valuation
This table compares Orion Engineered Carbons S.A and Innospec’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Orion Engineered Carbons S.A||$1.36 billion||0.94||$268.66 million||$0.85||25.24|
|Innospec||$1.06 billion||1.28||$150.30 million||$3.13||17.94|
Orion Engineered Carbons S.A has higher revenue and earnings than Innospec. Innospec 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.
Risk and Volatility
Orion Engineered Carbons S.A has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500. Comparatively, Innospec has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for Orion Engineered Carbons S.A and Innospec, as provided 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 currently has a consensus target price of $23.33, suggesting a potential upside of 8.78%. Innospec has a consensus target price of $65.00, suggesting a potential upside of 15.76%. Given Innospec’s stronger consensus rating and higher probable upside, analysts clearly believe Innospec is more favorable than Orion Engineered Carbons S.A.
This table compares Orion Engineered Carbons S.A and Innospec’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%|
Insider & Institutional Ownership
37.2% of Orion Engineered Carbons S.A shares are owned by institutional investors. Comparatively, 91.7% of Innospec shares are owned by institutional investors. 2.0% of Innospec shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Innospec beats Orion Engineered Carbons S.A on 10 of the 16 factors compared between the two stocks.
About Orion Engineered Carbons S.A
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.
Innospec Inc. is a specialty chemicals company engaged in developing, manufacturing, blending, marketing and supplying of specialty chemicals for use as fuel additives and ingredients for personal care, home care, agrochemical, mining and other applications and oilfield chemicals. The Company operates through four business segments: Fuel Specialties, Performance Chemicals, Oilfield Services and Octane Additives. Its Fuel Specialties develops, manufactures, blends, markets and supplies various specialty chemical products that are used as additives for a range of fuels. Its Performance Chemicals provides technology-based solutions. Its Oilfield Services business supplies drilling, completion and production chemicals. Its Octane Additives business manufactures a fuel additive for use in automotive gasoline and provides services in respect of environmental remediation. Its customers include oil and gas exploration and production companies, fuel users, and oil refiners among others.
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