Financial Contrast: Innospec (IOSP) & Platform Specialty Products (PAH)

Platform Specialty Products (NYSE: PAH) and Innospec (NASDAQ:IOSP) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Dividends

Innospec pays an annual dividend of $0.78 per share and has a dividend yield of 1.1%. Platform Specialty Products does not pay a dividend. Innospec pays out 21.5% of its earnings in the form of a dividend.

Volatility & Risk

Platform Specialty Products has a beta of 3.07, indicating that its share price is 207% more volatile than the S&P 500. Comparatively, Innospec has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Platform Specialty Products and Innospec, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Platform Specialty Products 0 3 6 0 2.67
Innospec 0 2 1 0 2.33

Platform Specialty Products currently has a consensus target price of $13.11, indicating a potential upside of 23.69%. Innospec has a consensus target price of $65.00, indicating a potential downside of 8.77%. Given Platform Specialty Products’ stronger consensus rating and higher possible upside, equities analysts plainly believe Platform Specialty Products is more favorable than Innospec.

Profitability

This table compares Platform Specialty Products and Innospec’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Platform Specialty Products -4.12% 7.45% 2.15%
Innospec 7.45% 15.05% 8.38%

Institutional and Insider Ownership

93.5% of Platform Specialty Products shares are held by institutional investors. Comparatively, 91.2% of Innospec shares are held by institutional investors. 5.2% of Platform Specialty Products shares are held by insiders. Comparatively, 2.0% of Innospec shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Platform Specialty Products and Innospec’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Platform Specialty Products $3.59 billion 0.85 -$73.70 million ($0.48) -22.08
Innospec $883.40 million 1.95 $81.30 million $3.62 19.68

Innospec has lower revenue, but higher earnings than Platform Specialty Products. Platform Specialty Products is trading at a lower price-to-earnings ratio than Innospec, indicating that it is currently the more affordable of the two stocks.

About Platform Specialty Products

Platform Specialty Products Corporation produces and sells specialty chemical products in the Americas, the Asia-Pacific, and Europe. It operates through two segments, Performance Solutions and Agricultural Solutions. The Performance Solutions segment offers plating products that are used to plate holes; electroless nickel products, which are applied to various metal and plastic surfaces; electronic assembly materials for use in the electronic market and residential boiler systems; final finishes that are used on printed circuit boards; circuit formation products for surface preparation; oxides, which are used in the fabrication of multilayer circuit boards; semiconductor materials and packaging products; and pre-treatment and cleaning solutions. This segment also provides functional conversion coatings that are applied to metals to enhance corrosion resistance and paint adhesion; hard-coated films, which are used for the membrane switch in the touch screen markets; production and drilling fluids used in subsea control systems; solid sheet printing elements for use in flexographic printing and platemaking processes; liquid products to produce printing plates; and printing equipment. The Agricultural Solutions segment offers fungicides and biofungicides to prevent the spread of fungi and other diseases in crops; herbicides to control unwanted plants; insecticides, bioinsecticides, and acaricides; biostimulants and nutrition products; and seed treatment products, which are applied to seed before planting, as well as animal health products, such as honey bee protective miticides and veterinary vaccines. The company was formerly known as Platform Acquisition Holdings Limited and changed its name to Platform Specialty Products Corporation in October 2013. Platform Specialty Products Corporation was founded in 1922 and is headquartered in West Palm Beach, Florida.

About Innospec

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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