Northern Technologies International (NASDAQ:NTIC) vs. Sumitomo Chemcl (OTCMKTS:SOMMY) Critical Contrast

Northern Technologies International (NASDAQ:NTIC) and Sumitomo Chemcl (OTCMKTS:SOMMY) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings for Northern Technologies International and Sumitomo Chemcl, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northern Technologies International	2	0	0	0	1.00
Sumitomo Chemcl	0	1	0	0	2.00

Dividends

Northern Technologies International pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Sumitomo Chemcl pays an annual dividend of $0.28 per share and has a dividend yield of 1.8%. Northern Technologies International pays out -400.0% of its earnings in the form of a dividend. Sumitomo Chemcl pays out 16.2% 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.

Valuation and Earnings

This table compares Northern Technologies International and Sumitomo Chemcl”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northern Technologies International	$84.23 million	0.84	$5.41 million	($0.01)	-748.00
Sumitomo Chemcl	$17.12 billion	0.30	$254.70 million	$1.73	8.84

Sumitomo Chemcl has higher revenue and earnings than Northern Technologies International. Northern Technologies International is trading at a lower price-to-earnings ratio than Sumitomo Chemcl, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Northern Technologies International has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500. Comparatively, Sumitomo Chemcl has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Institutional & Insider Ownership

32.9% of Northern Technologies International shares are owned by institutional investors. 24.3% of Northern Technologies International shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Northern Technologies International and Sumitomo Chemcl’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northern Technologies International	3.46%	3.38%	2.66%
Sumitomo Chemcl	0.35%	0.80%	0.25%

Summary

Northern Technologies International beats Sumitomo Chemcl on 8 of the 14 factors compared between the two stocks.

About Northern Technologies International

Northern Technologies International Corporation develops and markets rust and corrosion inhibiting solutions in North America, South America, Europe, Asia, the Middle East and internationally. It offers rust and corrosion inhibiting products, such as plastic and paper packaging, liquids, coatings, rust removers, cleaners, diffusers, and engineered solutions designed for the oil and gas industry under the ZERUST brand. The company provides a portfolio of bio-based and certified compostable polymer resin compounds and finished products under the Natur-Tec brand. In addition, it offers on-site and technical consulting for rust and corrosion prevention issues. It sells its products and services to automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets through direct sales force, network of independent distributors, agents, manufacturer's sales representatives, and strategic partners. The company was founded in 1970 and is headquartered in Circle Pines, Minnesota.

About Sumitomo Chemcl

Sumitomo Chemical Company, Limited engages in Chemicals & Plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Essential Chemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; resorcinol for tires, wood adhesives, flame retardants, and ultraviolet ray absorbants; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists and polymer OLED for LC and OLED displays; photoresists and high-purity chemicals for the semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.