Chemours (NYSE: CC) and Innospec (NASDAQ:IOSP) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.
This table compares Chemours and Innospec’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Chemours pays an annual dividend of $0.68 per share and has a dividend yield of 1.4%. Innospec pays an annual dividend of $0.78 per share and has a dividend yield of 1.1%. Chemours pays out 17.8% of its earnings in the form of a dividend. Innospec pays out 16.7% 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.
This is a summary of current ratings and price targets for Chemours and Innospec, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Chemours currently has a consensus target price of $58.94, indicating a potential upside of 21.09%. Innospec has a consensus target price of $65.00, indicating a potential downside of 4.27%. Given Chemours’ stronger consensus rating and higher probable upside, equities analysts plainly believe Chemours is more favorable than Innospec.
Earnings and Valuation
This table compares Chemours and Innospec’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Chemours||$6.18 billion||1.44||$746.00 million||$3.82||12.74|
|Innospec||$1.31 billion||1.29||$61.80 million||$4.66||14.57|
Chemours has higher revenue and earnings than Innospec. Chemours is trading at a lower price-to-earnings ratio than Innospec, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Chemours has a beta of 2.95, indicating that its share price is 195% more volatile than the S&P 500. Comparatively, Innospec has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.
Insider & Institutional Ownership
77.8% of Chemours shares are held by institutional investors. Comparatively, 92.5% of Innospec shares are held by institutional investors. 1.8% of Chemours shares are held by insiders. Comparatively, 2.0% of Innospec shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Chemours beats Innospec on 11 of the 16 factors compared between the two stocks.
The Chemours Company is a provider of performance chemicals. The Company operates through three segments: Titanium Technologies, Fluoroproducts and Chemical Solutions. The Titanium Technologies segment is a producer of titanium dioxide (TiO2). The Fluoroproducts segment is a provider of fluoroproducts, including refrigerants and industrial fluoropolymer resins. The Chemical Solutions segment is a North American provider of industrial chemicals used in gold production, oil and gas, water treatment and other industries. It delivers customized solutions with a range of industrial and specialty chemical products for markets, including plastics and coatings, refrigeration and air conditioning, industrial, mining and oil refining. Its products include titanium dioxide, refrigerants, industrial fluoropolymer resins and a portfolio of mining and industrial chemicals, including sodium cyanide. As of December 31, 2016, the Company operates 26 production facilities located in 10 countries.
Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals for use as fuel additives, ingredients for personal care, home care, agrochemical, mining and other applications, and oilfield chemicals worldwide. It operates through four segments: Fuel Specialties, Performance Chemicals, Oilfield Services, and Octane Additives. The Fuel Specialties segment offers a range of specialty chemical products used as additives in various fuels. This segment's products are used in the operation of automotive, marine, and aviation engines; power station generators; and heating oil. The Performance Chemicals segment provides technology-based solutions for its customers' processes or products focused in the personal care, home care, agrochemical, and mining markets. The Oilfield Services segment develops and markets products to prevent loss of mud in drilling operations; chemical solutions for fracturing, stimulation, and completion operations; and products for oil and gas production, which enable flow assurance and asset integrity. The Octane Additives segment produces and sells tetra ethyl lead (TEL) for use in automotive gasoline. This segment is also involved in an environmental remediation business that manages the cleanup of redundant TEL plants. The company serves oil and gas exploration and production companies, oil refineries, fuel manufacturers and users, formulators of personal care and home care, agrochemical and mining formulations, and other chemical and industrial companies. The company was formerly known as Octel Corp. and changed its name to Innospec Inc. in January 2006. Innospec Inc. was founded in 1938 and is headquartered in Englewood, Colorado.
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