Northern Technologies International (NASDAQ:NTIC – Get Free Report) and Methanex (NASDAQ:MEOH – Get Free Report) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.
Profitability
This table compares Northern Technologies International and Methanex’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% |
| Methanex | 7.02% | 12.61% | 4.66% |
Risk & Volatility
Northern Technologies International has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500. Comparatively, Methanex has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Northern Technologies International | $85.27 million | 0.88 | $5.41 million | $0.30 | 26.43 |
| Methanex | $3.58 billion | 0.85 | $163.99 million | $3.39 | 11.58 |
Methanex has higher revenue and earnings than Northern Technologies International. Methanex is trading at a lower price-to-earnings ratio than Northern Technologies International, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Northern Technologies International and Methanex, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Northern Technologies International | 1 | 0 | 0 | 0 | 1.00 |
| Methanex | 0 | 3 | 7 | 3 | 3.00 |
Methanex has a consensus target price of $46.00, suggesting a potential upside of 17.20%. Given Methanex’s stronger consensus rating and higher probable upside, analysts clearly believe Methanex is more favorable than Northern Technologies International.
Insider & Institutional Ownership
32.9% of Northern Technologies International shares are owned by institutional investors. Comparatively, 73.5% of Methanex shares are owned by institutional investors. 24.3% of Northern Technologies International shares are owned by insiders. Comparatively, 1.0% of Methanex shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Dividends
Northern Technologies International pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 1.9%. Northern Technologies International pays out 13.3% of its earnings in the form of a dividend. Methanex pays out 21.8% 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. Methanex has increased its dividend for 4 consecutive years. Methanex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Methanex beats Northern Technologies International on 14 of the 18 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 Methanex
Methanex Corporation produces and supplies methanol in China, Europe, the United States, South America, South Korea, Canada, and Asia. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.
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