Financial Contrast: Solvay (OTCMKTS:SVYSF) versus Quaker Houghton (NYSE:KWR)

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

Profitability

This table compares Quaker Houghton and Solvay’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%
Solvay	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Quaker Houghton and Solvay, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quaker Houghton	0	1	4	1	3.00
Solvay	0	0	0	0	0.00

Quaker Houghton presently has a consensus price target of $187.67, suggesting a potential upside of 10.40%. Given Quaker Houghton’s stronger consensus rating and higher possible upside, equities analysts plainly believe Quaker Houghton is more favorable than Solvay.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quaker Houghton	$1.89 billion	1.55	-$2.49 million	$5.61	30.30
Solvay	N/A	N/A	N/A	($1.24)	-24.31

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

Dividends

Quaker Houghton pays an annual dividend of $2.03 per share and has a dividend yield of 1.2%. Solvay pays an annual dividend of $2.40 per share and has a dividend yield of 8.0%. Quaker Houghton pays out 36.2% of its earnings in the form of a dividend. Solvay pays out -193.5% 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. Quaker Houghton has raised its dividend for 17 consecutive years. Solvay is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

77.5% of Quaker Houghton shares are owned by institutional investors. Comparatively, 18.8% of Solvay shares are owned by institutional investors. 1.0% of Quaker Houghton shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Quaker Houghton beats Solvay on 13 of the 15 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 Solvay

Solvay SA provides advanced materials and specialty chemicals worldwide. It operates through four segments: Materials, Chemicals, Solutions, and Corporate & Business Services. The Materials segment offers specialty polymers, including aromatic polymers, high barrier polymers, and fluoropolymers for the electronics, automotive, aerospace, and healthcare industries; and composite materials for aerospace engineered materials market. The Chemicals segment produces and sells soda ash and sodium bicarbonate primarily to the flat and container glass industries, as well as for use in detergents, pharmaceutical, and feed and food industries; hydrogen peroxide for use primarily in the paper industry to bleach pulp, as well as chemicals, electronics, food, mining, and environment; and dispersible silica for tire manufacturers; and solvent solutions, phenols and derivatives, polyamide derivatives and smart, functional, and sustainable yarns and polymers. The Solutions segment offers specialty chemicals for agro, home and personal care, coatings, and industrial markets; technology solutions in specialty mining reagents, phosphine-based chemistry, and solutions for the stabilization of polymers; fluorine and rare-earth formulations for automotive, electronics, agrochemical, and construction applications; and vanillin for the food, flavors, and fragrances industries, as well as value-added intermediates used in monomers and polymers, pharmaceuticals, agrochemicals, and electronics. This segment also provides various products for upstream oilfield chemicals sector, as well as sodium hypophosphite for metal plating and other applications; and PROBAN, a technological process that offers durable flame retardant properties to cotton-based textiles. The Corporate & Business Services segment provides energy and other business services. The company was founded in 1863 and is headquartered in Brussels, Belgium.