Critical Review: Quaker Houghton (NYSE:KWR) versus Clariant (OTCMKTS:CLZNY)

Quaker Houghton (NYSE:KWR) and Clariant (OTCMKTS:CLZNY) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Quaker Houghton and Clariant, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quaker Houghton	0	1	3	1	3.00
Clariant	1	4	3	0	2.25

Quaker Houghton currently has a consensus price target of $187.67, suggesting a potential upside of 9.97%. Given Quaker Houghton’s stronger consensus rating and higher probable upside, analysts clearly believe Quaker Houghton is more favorable than Clariant.

Dividends

Quaker Houghton pays an annual dividend of $2.12 per share and has a dividend yield of 1.2%. Clariant pays an annual dividend of $1.32 per share and has a dividend yield of 9.7%. Quaker Houghton pays out 37.8% of its earnings in the form of a dividend. Clariant pays out 283.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Quaker Houghton has raised its dividend for 17 consecutive years.

Institutional and Insider Ownership

77.5% of Quaker Houghton shares are held by institutional investors. Comparatively, 0.2% of Clariant shares are held by institutional investors. 1.0% of Quaker Houghton shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Quaker Houghton and Clariant”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quaker Houghton	$1.98 billion	1.49	-$2.49 million	$5.61	30.42
Clariant	N/A	N/A	N/A	$0.47	29.17

Clariant has lower revenue, but higher earnings than Quaker Houghton. Clariant 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 Quaker Houghton and Clariant’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quaker Houghton	4.94%	9.55%	4.66%
Clariant	N/A	N/A	N/A

Summary

Quaker Houghton beats Clariant on 13 of the 14 factors compared between the two stocks.

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.

About Clariant

Clariant AG engages in the development, manufacture, distribution, and sale of specialty chemicals worldwide. The Care Chemicals segment offers specialty chemicals and application solutions for various applications in automotive fluids, aviation, construction chemicals, crop solutions, health care, home care, industrial lubricants, paints and coatings, personal care, and special solvents. The Catalysis segment provides catalyst products for use as ammonia cracking, ammonia, custom catalysts, ethylene and derivatives, fischer-tropsch, fuel cell, fuel upgrading, gas processing, hydrogen, hydrogenation, liquid hydrogen carrier, low-carbon ammonia, low-carbon methanol, methanol, methanol-to-propylene, off-gas treatment, olefins purification, on-purpose propylene, oxidation, polypropylene, refinery stream purification, styrene, zeolite powders, biocatalysis, cellulosic ethanol, cellulosic sugars, low-carbon advanced biofuels, and residue-derived biochemical intermediates. The Adsorbents and Additives segment provides chemicals for oil, gas, mining, and refinery industries; services for oil and gas industries; emulsifiers for explosives, as well as cold-flow additive applications for middle distillates in refineries; mineral-based specialty products for bio- and renewable fuel purification, BTX catalysts, cargo and device protection, cat litter, chemical recycling, civil engineering, clay specialties, detergent additives, edible oil purification, feed additives, foundry additives, kerosene and jet fuel purification, paper additives, PVC stabilizers, and wastewater treatment applications; and flame retardants, performance additives, and advanced surface solutions for use in acid scavengers, antioxidiants, antistatic agents, halogen-free flame retardants, heat stabilizers, hot-melt adhesives, light stabilizers, lubricants, processing aids, processing stabilizers, release agents, slip control agents, and surface modifiers. The company was founded in 1886 and is headquartered in Muttenz, Switzerland.