Critical Review: W.R. Grace & Co. (GRA) and Minerals Technologies (MTX)

W.R. Grace & Co. (NYSE: GRA) and Minerals Technologies (NYSE:MTX) are both mid-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Profitability

This table compares W.R. Grace & Co. and Minerals Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
W.R. Grace & Co. 8.54% 48.03% 6.40%
Minerals Technologies 9.48% 14.59% 5.57%

Analyst Ratings

This is a summary of recent recommendations and price targets for W.R. Grace & Co. and Minerals Technologies, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W.R. Grace & Co. 0 3 7 0 2.70
Minerals Technologies 0 1 1 0 2.50

W.R. Grace & Co. presently has a consensus price target of $81.00, suggesting a potential upside of 13.91%. Minerals Technologies has a consensus price target of C$80.00, suggesting a potential upside of 12.20%. Given W.R. Grace & Co.’s stronger consensus rating and higher possible upside, research analysts plainly believe W.R. Grace & Co. is more favorable than Minerals Technologies.

Volatility and Risk

W.R. Grace & Co. has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Minerals Technologies has a beta of 2.26, meaning that its stock price is 126% more volatile than the S&P 500.

Insider and Institutional Ownership

85.3% of W.R. Grace & Co. shares are held by institutional investors. Comparatively, 93.9% of Minerals Technologies shares are held by institutional investors. 1.3% of W.R. Grace & Co. shares are held by company insiders. Comparatively, 2.2% of Minerals Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares W.R. Grace & Co. and Minerals Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
W.R. Grace & Co. $1.60 billion 3.01 $94.10 million $2.13 33.39
Minerals Technologies $1.64 billion 1.54 $133.40 million C$4.39 16.24

Minerals Technologies has higher revenue and earnings than W.R. Grace & Co.. Minerals Technologies is trading at a lower price-to-earnings ratio than W.R. Grace & Co., indicating that it is currently the more affordable of the two stocks.

Dividends

W.R. Grace & Co. pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. Minerals Technologies pays an annual dividend of C$0.20 per share and has a dividend yield of 0.3%. W.R. Grace & Co. pays out 39.4% of its earnings in the form of a dividend. Minerals Technologies pays out 4.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

W.R. Grace & Co. Company Profile

W. R. Grace & Co. (Grace) is engaged in the production and sale of specialty chemicals and specialty materials. The Company operates in two segments: Grace Catalysts Technologies and Grace Materials Technologies. The Grace Catalysts Technologies segment includes catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications. The Grace Materials Technologies segment includes specialty materials, including silica-based and silica-alumina-based materials, used in coatings, consumer, industrial, and pharmaceutical applications. It Grace Catalysts Technologies segment produces and sells catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications, including Fluid catalytic cracking catalysts (FCC), Hydroprocessing catalysts (HPC), and Polyolefin catalysts and catalyst supports.

Minerals Technologies Company Profile

Minerals Technologies Inc. is a resource- and technology-based company that develops, produces and markets a range of specialty mineral, mineral-based and synthetic mineral products and related systems and services around the world. It operates through four segments. The Specialty Minerals segment produces and sells the synthetic mineral product precipitated calcium carbonate (PCC), mines mineral ores, and processes and sells natural mineral products, primarily limestone and talc. The Performance Materials segment is a supplier of bentonite and bentonite-related products to industrial and consumer markets globally. The Refractories segment produces and markets monolithic and shaped refractory materials and specialty products, services and application and measurement equipment. The Energy Services segment offers a range of services to improve the production, costs, compliance and environmental impact of activities performed in the oil and gas industry.

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