Critical Analysis: Eastman Chemical Company (EMN) and Koppers Holdings (NYSE:KOP)
Koppers Holdings (NYSE: KOP) and Eastman Chemical Company (NYSE:EMN) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitabiliy, analyst recommendations and dividends.
Volatility and Risk
Koppers Holdings has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Eastman Chemical Company has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.
Earnings and Valuation
This table compares Koppers Holdings and Eastman Chemical Company’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Koppers Holdings||$1.42 billion||0.54||$169.60 million||$1.65||22.15|
|Eastman Chemical Company||$9.08 billion||1.37||$2.10 billion||$6.03||14.16|
Eastman Chemical Company has higher revenue and earnings than Koppers Holdings. Eastman Chemical Company is trading at a lower price-to-earnings ratio than Koppers Holdings, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
90.7% of Koppers Holdings shares are held by institutional investors. Comparatively, 87.9% of Eastman Chemical Company shares are held by institutional investors. 3.9% of Koppers Holdings shares are held by company insiders. Comparatively, 1.1% of Eastman Chemical Company shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This is a summary of current ratings for Koppers Holdings and Eastman Chemical Company, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Eastman Chemical Company||0||5||6||0||2.55|
Koppers Holdings currently has a consensus target price of $45.75, suggesting a potential upside of 25.17%. Eastman Chemical Company has a consensus target price of $84.11, suggesting a potential downside of 1.51%. Given Koppers Holdings’ stronger consensus rating and higher probable upside, research analysts clearly believe Koppers Holdings is more favorable than Eastman Chemical Company.
This table compares Koppers Holdings and Eastman Chemical Company’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Eastman Chemical Company||9.84%||22.23%||6.53%|
Eastman Chemical Company pays an annual dividend of $2.04 per share and has a dividend yield of 2.4%. Koppers Holdings does not pay a dividend. Eastman Chemical Company pays out 33.8% of its earnings in the form of a dividend. Koppers Holdings has raised its dividend for 5 consecutive years and Eastman Chemical Company has raised its dividend for 5 consecutive years.
Eastman Chemical Company beats Koppers Holdings on 9 of the 16 factors compared between the two stocks.
About Koppers Holdings
Koppers Holdings Inc. is a global integrated provider of treated wood products, wood treatment chemicals and carbon compounds. The Company operates through three segments: Railroad and Utility Products and Services (RUPS), Carbon Materials and Chemicals (CMC) and Performance Chemicals (PC). The RUPS business sells treated and untreated wood products, rail joint bars and services primarily to the railroad markets. The primary products supplied by PC business are copper-based wood preservatives, including micronized copper quaternary and micronized copper azole (MicroPro), micronized pigments (MicroShades) and chromated copper arsenate. Through CMC business, the Company processes coal tar into a range of products, including carbon pitch, creosote and carbon black feedstock. Its products and services are used in a range of markets, including the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber and construction industries.
About Eastman Chemical Company
Eastman Chemical Company (Eastman) is an advanced materials and specialty additives company. The Company’s segments include Additives & Functional Products (AFP), Advanced Materials (AM), Chemical Intermediates (CI), and Fibers. In the AFP segment, it manufactures chemicals for products in the coatings, tires, consumables, building and construction, industrial applications, including solar energy markets, animal nutrition, care chemicals, crop protection, and energy markets. In the AM segment, it produces and markets its polymers, films, and plastics with differentiated performance properties for end uses in transportation, consumables, building and construction, durable goods, and health and wellness products. The CI segment leverages large scale and vertical integration from the cellulose and acetyl, olefins, and alkylamines streams to support its specialty operating segments. Its product lines in Fibers segment include Acetate Tow, Acetate Yarn and Acetyl Chemical Products.
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