Analyzing Mosaic (NYSE:MOS) and Rayonier Advanced Materials (NYSE:RYAM)

Rayonier Advanced Materials (NYSE:RYAM) and Mosaic (NYSE:MOS) are both materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Dividends

Rayonier Advanced Materials pays an annual dividend of $0.28 per share and has a dividend yield of 4.3%. Mosaic pays an annual dividend of $0.88 per share and has a dividend yield of 5.0%. Rayonier Advanced Materials pays out -13.3% of its earnings in the form of a dividend. Mosaic pays out -43.6% 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. Mosaic has increased its dividend for 7 consecutive years. Mosaic is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Rayonier Advanced Materials has a beta of 1.84, meaning that its stock price is 84% more volatile than the S&P 500. Comparatively, Mosaic has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Earnings and Valuation

This table compares Rayonier Advanced Materials and Mosaic”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rayonier Advanced Materials	$1.47 billion	0.30	-$420.67 million	($2.10)	-3.08
Mosaic	$12.05 billion	0.47	$540.70 million	($2.02)	-8.76

Mosaic has higher revenue and earnings than Rayonier Advanced Materials. Mosaic is trading at a lower price-to-earnings ratio than Rayonier Advanced Materials, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Rayonier Advanced Materials and Mosaic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rayonier Advanced Materials	-9.53%	-46.19%	-7.28%
Mosaic	-5.21%	3.77%	1.87%

Institutional and Insider Ownership

68.6% of Rayonier Advanced Materials shares are held by institutional investors. Comparatively, 77.5% of Mosaic shares are held by institutional investors. 3.2% of Rayonier Advanced Materials shares are held by company insiders. Comparatively, 0.3% of Mosaic shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Rayonier Advanced Materials and Mosaic, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rayonier Advanced Materials	1	1	1	0	2.00
Mosaic	3	13	6	0	2.14

Rayonier Advanced Materials currently has a consensus target price of $13.00, indicating a potential upside of 100.77%. Mosaic has a consensus target price of $26.50, indicating a potential upside of 49.68%. Given Rayonier Advanced Materials’ higher probable upside, analysts plainly believe Rayonier Advanced Materials is more favorable than Mosaic.

Summary

Mosaic beats Rayonier Advanced Materials on 14 of the 17 factors compared between the two stocks.

About Rayonier Advanced Materials

Rayonier Advanced Materials Inc. manufactures and sells cellulose specialty products in the United States, China, Latin America, Canada, Japan, Europe, Latin America, other Asian countries, and internationally. It operates through High Purity Cellulose, Paperboard, and High-Yield Pulp segments. The company’s products include cellulose specialties, which are natural polymers that are used as raw materials to manufacture a range of consumer-oriented products, such as liquid crystal displays, impact-resistant plastics, thickeners for food products, pharmaceuticals, cosmetics, cigarette filters, high-tenacity rayon yarn for tires and industrial hoses, food casings, paints, and lacquers. It also offers commodity products, such as commodity viscose pulp used in woven applications, including rayon textiles for clothing and other fabrics, as well as in non-woven applications comprising baby wipes, cosmetic and personal wipes, industrial wipes, and mattress ticking; and absorbent materials consisting of fluff fibers that are used as an absorbent medium in disposable baby diapers, feminine hygiene products, incontinence pads, convalescent bed pads, industrial towels and wipes, and non-woven fabrics. In addition, the company provides paperboards for packaging, printing documents, brochures, promotional materials, paperback books and catalog covers, file folders, tags, and lottery tickets; and high-yield pulps to produces hardwood aspen, maple, and birch species for paperboard, packaging, printing and writing papers, and various other paper products. The company was founded in 1926 and is headquartered in Jacksonville, Florida.

About Mosaic

The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients in North America and internationally. The company operates through three segments: Phosphates, Potash, and Mosaic Fertilizantes. It owns and operates mines, which produce concentrated phosphate crop nutrients, such as diammonium phosphate, monoammonium phosphate, and ammoniated phosphate products; and phosphate-based animal feed ingredients primarily under the Biofos and Nexfos brand names, as well as produces a double sulfate of potash magnesia product under K-Mag brand name. The company also produces and sells potash for use in the manufacturing of mixed crop nutrients and animal feed ingredients, and for industrial use; and for use in the de-icing and as a water softener regenerant. In addition, it provides nitrogen-based crop nutrients, animal feed ingredients, and other ancillary services; and purchases and sells phosphates, potash, and nitrogen products. The company sells its products to wholesale distributors, retail chains, farmers, cooperatives, independent retailers, and national accounts. The company was incorporated in 2004 and is headquartered in Tampa, Florida.