Reviewing Air Products and Chemicals (NYSE:APD) & Quaker Houghton (NYSE:KWR)

Air Products and Chemicals (NYSE:APD) and Quaker Houghton (NYSE:KWR) are both materials companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, profitability, dividends, analyst recommendations, risk, valuation and institutional ownership.

Dividends

Air Products and Chemicals pays an annual dividend of $7.24 per share and has a dividend yield of 2.4%. Quaker Houghton pays an annual dividend of $2.03 per share and has a dividend yield of 1.3%. Air Products and Chemicals pays out -3,290.9% of its earnings in the form of a dividend. Quaker Houghton pays out 36.2% 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. Air Products and Chemicals has raised its dividend for 43 consecutive years and Quaker Houghton has raised its dividend for 17 consecutive years. Air Products and Chemicals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Air Products and Chemicals has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, Quaker Houghton has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500.

Earnings and Valuation

This table compares Air Products and Chemicals and Quaker Houghton”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Air Products and Chemicals	$12.04 billion	5.54	-$394.50 million	($0.22)	-1,359.98
Quaker Houghton	$1.89 billion	1.43	-$2.49 million	$5.61	28.00

Quaker Houghton has lower revenue, but higher earnings than Air Products and Chemicals. Air Products and Chemicals is trading at a lower price-to-earnings ratio than Quaker Houghton, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Air Products and Chemicals and Quaker Houghton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Air Products and Chemicals	-0.38%	16.87%	7.18%
Quaker Houghton	4.94%	9.55%	4.66%

Insider & Institutional Ownership

81.7% of Air Products and Chemicals shares are owned by institutional investors. Comparatively, 77.5% of Quaker Houghton shares are owned by institutional investors. 1.9% of Air Products and Chemicals shares are owned by company insiders. Comparatively, 1.0% of Quaker Houghton shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Air Products and Chemicals and Quaker Houghton, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Air Products and Chemicals	0	7	10	2	2.74
Quaker Houghton	0	1	4	1	3.00

Air Products and Chemicals currently has a consensus target price of $333.88, indicating a potential upside of 11.59%. Quaker Houghton has a consensus target price of $188.00, indicating a potential upside of 19.69%. Given Quaker Houghton’s stronger consensus rating and higher possible upside, analysts clearly believe Quaker Houghton is more favorable than Air Products and Chemicals.

Summary

Air Products and Chemicals beats Quaker Houghton on 11 of the 18 factors compared between the two stocks.

About Air Products and Chemicals

Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and related services in the Americas, Asia, Europe, the Middle East, India, and internationally. The company produces atmospheric gases, including oxygen, nitrogen, and argon; process gases, such as hydrogen, helium, carbon dioxide, carbon monoxide, and syngas; and specialty gases for customers in various industries, including refining, chemical, manufacturing, electronics, energy production, medical, food, and metals. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania.

About Quaker Houghton

Quaker Chemical Corporation, together with its subsidiaries, develops, produces, and markets various formulated specialty chemical products for a range of heavy industrial and manufacturing applications in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die-cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids, and surface treatment chemicals. The company also provides chemical management services. It serves steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies. The company was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.