International Flavors & Fragrances (IFF) & Methanex (MEOH) Head to Head Review

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International Flavors & Fragrances (NYSE:IFF) and Methanex (NASDAQ:MEOH) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, earnings, risk, valuation and institutional ownership.

Insider and Institutional Ownership

82.9% of International Flavors & Fragrances shares are held by institutional investors. Comparatively, 72.0% of Methanex shares are held by institutional investors. 0.4% of International Flavors & Fragrances shares are held by insiders. Comparatively, 1.0% of Methanex shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

International Flavors & Fragrances pays an annual dividend of $2.92 per share and has a dividend yield of 2.4%. Methanex pays an annual dividend of $1.32 per share and has a dividend yield of 2.3%. International Flavors & Fragrances pays out 46.5% of its earnings in the form of a dividend. Methanex pays out 19.2% 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. International Flavors & Fragrances has raised its dividend for 9 consecutive years and Methanex has raised its dividend for 8 consecutive years. International Flavors & Fragrances is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

International Flavors & Fragrances has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Methanex has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Profitability

This table compares International Flavors & Fragrances and Methanex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
International Flavors & Fragrances 8.48% 15.56% 6.65%
Methanex 14.48% 31.00% 11.87%

Valuation and Earnings

This table compares International Flavors & Fragrances and Methanex’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
International Flavors & Fragrances $3.98 billion 3.32 $337.30 million $6.28 19.70
Methanex $3.93 billion 1.11 $568.98 million $6.86 8.22

Methanex has lower revenue, but higher earnings than International Flavors & Fragrances. Methanex is trading at a lower price-to-earnings ratio than International Flavors & Fragrances, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for International Flavors & Fragrances and Methanex, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
International Flavors & Fragrances 3 4 4 0 2.09
Methanex 0 7 6 0 2.46

International Flavors & Fragrances currently has a consensus price target of $143.25, suggesting a potential upside of 15.80%. Methanex has a consensus price target of $77.17, suggesting a potential upside of 36.89%. Given Methanex’s stronger consensus rating and higher probable upside, analysts plainly believe Methanex is more favorable than International Flavors & Fragrances.

Summary

Methanex beats International Flavors & Fragrances on 11 of the 17 factors compared between the two stocks.

International Flavors & Fragrances Company Profile

International Flavors & Fragrances Inc., together with its subsidiaries, manufactures flavors and fragrances for use in various consumer products. It operates through two segments, Flavors and Fragrances. The Flavors segment offers flavor compounds primarily to the food and beverage industries for use in consumer products, such as prepared foods, beverages, dairy, food, and sweet products. The Fragrances segment provides fragrance compounds, which include fine fragrances comprising perfumes and colognes, as well as consumer fragrances for personal care, household products, and beauty care; fragrance ingredients comprising synthetic and natural ingredients that could be combined with other materials to create fragrance and consumer compounds; and cosmetic active ingredients consisting of active and functional ingredients, botanicals, and delivery systems to support its customers' cosmetic and personal care product lines. This segment serves perfume and toiletries manufacturers in the cosmetics industry; and manufacturers of soaps, detergents, fabric care, household cleaners, and air fresheners in the household products industry. The company has operations in Europe, Africa, the Middle East, Greater Asia, North America, and Latin America. International Flavors & Fragrances Inc. was founded in 1833 and is headquartered in New York, New York.

Methanex Company Profile

Methanex Corporation produces and sells methanol in North America, the Asia Pacific, Europe, and South America. It also purchases and sells methanol produced by others under methanol offtake contracts and on the spot market. The company was founded in 1968 and is headquartered in Vancouver, Canada.

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