OMNOVA Solutions (NYSE: OMN) and Sensient Technologies Corporation (NYSE:SXT) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their profitabiliy, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Institutional & Insider Ownership

87.3% of OMNOVA Solutions shares are owned by institutional investors. Comparatively, 88.5% of Sensient Technologies Corporation shares are owned by institutional investors. 4.8% of OMNOVA Solutions shares are owned by insiders. Comparatively, 1.0% of Sensient Technologies Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares OMNOVA Solutions and Sensient Technologies Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OMNOVA Solutions -1.19% 19.65% 3.16%
Sensient Technologies Corporation 8.16% 17.15% 8.75%

Dividends

Sensient Technologies Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 1.6%. OMNOVA Solutions does not pay a dividend. Sensient Technologies Corporation pays out 48.4% of its earnings in the form of a dividend. Sensient Technologies Corporation has increased its dividend for 5 consecutive years.

Valuation and Earnings

This table compares OMNOVA Solutions and Sensient Technologies Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
OMNOVA Solutions $778.50 million 0.51 $82.20 million N/A N/A
Sensient Technologies Corporation $1.36 billion 2.41 $257.36 million $2.48 29.96

Sensient Technologies Corporation has higher revenue and earnings than OMNOVA Solutions.

Analyst Recommendations

This is a summary of recent recommendations for OMNOVA Solutions and Sensient Technologies Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OMNOVA Solutions 0 0 2 0 3.00
Sensient Technologies Corporation 0 1 1 0 2.50

OMNOVA Solutions presently has a consensus target price of $12.00, indicating a potential upside of 36.36%. Sensient Technologies Corporation has a consensus target price of $84.00, indicating a potential upside of 13.06%. Given OMNOVA Solutions’ stronger consensus rating and higher probable upside, equities research analysts clearly believe OMNOVA Solutions is more favorable than Sensient Technologies Corporation.

Volatility & Risk

OMNOVA Solutions has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500. Comparatively, Sensient Technologies Corporation has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Summary

Sensient Technologies Corporation beats OMNOVA Solutions on 9 of the 16 factors compared between the two stocks.

OMNOVA Solutions Company Profile

OMNOVA Solutions Inc. is a provider of emulsion polymers, specialty chemicals and engineered surfaces for commercial, industrial and residential end uses. The Company’s segments include Performance Chemicals and Engineered Surfaces. The Performance Chemicals segment produces a range of emulsion polymers and specialty chemicals based on styrene butadiene, styrene butadiene acrylonitrile, styrene butadiene vinyl pyridine, nitrile butadiene, polyvinyl acetate, acrylic, styrene acrylic, vinyl acrylic, glyoxal, fluorochemical and bio-based chemistries. The Engineered Surfaces segment develops, designs, produces and markets a line of functional and decorative surfacing products, including coated fabrics, vinyl, paper, and specialty laminates and industrial films. The Performance Chemicals segment includes two product lines: Performance Materials and Specialty Chemicals, and the Engineered Surfaces segment includes two product lines: Coated Fabrics, and Laminates and Performance Films.

Sensient Technologies Corporation Company Profile

Sensient Technologies Corporation is a manufacturer and marketer of colors, flavors and fragrances. The Company uses technologies at facilities around the world to develop specialty food and beverage systems, cosmetic and pharmaceutical systems, specialty inks and colors, and other specialty and fine chemicals. The Company’s three segments include the Flavors & Fragrances Group and the Color Group, which are managed on a product-and-services basis, and the Asia Pacific Group, which is managed on a geographic basis. The Company’s principal products include flavors, flavor enhancers and bionutrients; fragrances, aroma chemicals and essential oils; natural ingredients, including dehydrated vegetables and other food ingredients; natural and synthetic food and beverage colors; cosmetic colors and ingredients and pharmaceutical excipients and ingredients, and technical colors, specialty inks and colors, and specialty dyes and pigments.

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