Northern Technologies International (NASDAQ:NTIC – Get Free Report) and Shin-Etsu Chemical (OTCMKTS:SHECY – Get Free Report) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.
Insider and Institutional Ownership
32.9% of Northern Technologies International shares are owned by institutional investors. Comparatively, 0.0% of Shin-Etsu Chemical shares are owned by institutional investors. 24.9% of Northern Technologies International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Dividends
Northern Technologies International pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Shin-Etsu Chemical pays an annual dividend of $0.23 per share and has a dividend yield of 1.1%. Northern Technologies International pays out -100.0% of its earnings in the form of a dividend. Shin-Etsu Chemical pays out 26.7% 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 & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Northern Technologies International | $84.24 million | 0.89 | $20,000.00 | ($0.04) | -198.00 |
| Shin-Etsu Chemical | $16.82 billion | 4.82 | $3.56 billion | $0.86 | 23.72 |
Shin-Etsu Chemical has higher revenue and earnings than Northern Technologies International. Northern Technologies International is trading at a lower price-to-earnings ratio than Shin-Etsu Chemical, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current ratings and recommmendations for Northern Technologies International and Shin-Etsu Chemical, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Northern Technologies International | 1 | 1 | 0 | 0 | 1.50 |
| Shin-Etsu Chemical | 0 | 1 | 0 | 0 | 2.00 |
Profitability
This table compares Northern Technologies International and Shin-Etsu Chemical’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Northern Technologies International | -0.35% | -0.44% | -0.34% |
| Shin-Etsu Chemical | 18.96% | 10.75% | 8.93% |
Volatility and Risk
Northern Technologies International has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500. Comparatively, Shin-Etsu Chemical has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.
Summary
Shin-Etsu Chemical beats Northern Technologies International on 11 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 Shin-Etsu Chemical
Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.
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