Critical Review: FutureFuel (FF) and Its Rivals

FutureFuel (NYSE:FF) is one of 1,051 public companies in the “Oil, Gas & Consumable Fuels” industry, but how does it weigh in compared to its peers? We will compare FutureFuel to related companies based on the strength of its institutional ownership, analyst recommendations, valuation, risk, earnings, profitability and dividends.

Analyst Ratings

This is a breakdown of recent recommendations for FutureFuel and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FutureFuel	1	0	0	0	1.00
FutureFuel Competitors	5984	27002	40865	2428	2.52

As a group, “Oil, Gas & Consumable Fuels” companies have a potential upside of 28.94%. Given FutureFuel’s peers stronger consensus rating and higher probable upside, analysts plainly believe FutureFuel has less favorable growth aspects than its peers.

Dividends

FutureFuel pays an annual dividend of $0.04 per share and has a dividend yield of 0.8%. FutureFuel pays out -5.7% of its earnings in the form of a dividend. As a group, “Oil, Gas & Consumable Fuels” companies pay a dividend yield of 9.2% and pay out -133.8% of their earnings in the form of a dividend. FutureFuel lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Valuation & Earnings

This table compares FutureFuel and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
FutureFuel	$95.74 million	-$49.40 million	-7.25
FutureFuel Competitors	$10.89 billion	$5.51 billion	-0.93

FutureFuel’s peers have higher revenue and earnings than FutureFuel. FutureFuel is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares FutureFuel and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FutureFuel	-19.94%	-19.75%	-15.47%
FutureFuel Competitors	-456.99%	19.35%	6.42%

Risk & Volatility

FutureFuel has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, FutureFuel’s peers have a beta of -3.76, indicating that their average stock price is 476% less volatile than the S&P 500.

Insider and Institutional Ownership

44.6% of FutureFuel shares are owned by institutional investors. Comparatively, 30.7% of shares of all “Oil, Gas & Consumable Fuels” companies are owned by institutional investors. 42.6% of FutureFuel shares are owned by company insiders. Comparatively, 15.5% of shares of all “Oil, Gas & Consumable Fuels” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

FutureFuel peers beat FutureFuel on 11 of the 15 factors compared.

About FutureFuel

FutureFuel Corp., together with its subsidiaries, manufactures and sells diversified chemical, bio-based fuel, and bio-based specialty chemical products in the United States. The company operates through two segments, Chemicals and Biofuels. The Chemicals segment provides various custom chemicals that are used in the coatings, chemical intermediates, industrial and consumer cleaning, oil and gas, and specialty polymers industries; and performance chemicals, such as polymer modifiers, glycerin products, and various specialty chemicals and solvents. The Biofuels segment is involved in the production and sale of biodiesel and petrodiesel blends; and markets its biodiesel products directly to customers through trucks, barges, and rail cars. FutureFuel Corp. is headquartered in Saint Louis, Missouri.