OM Group (NYSE: OMG) and Ferro Corporation (NYSE:FOE) are both small-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.

Earnings & Valuation

This table compares OM Group and Ferro Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
OM Group N/A N/A N/A N/A N/A
Ferro Corporation $1.24 billion 1.29 $174.53 million $0.15 127.88

Ferro Corporation has higher revenue and earnings than OM Group.

Profitability

This table compares OM Group and Ferro Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OM Group 3.68% 4.22% 2.58%
Ferro Corporation 1.06% 35.05% 7.69%

Insider and Institutional Ownership

96.4% of Ferro Corporation shares are owned by institutional investors. 2.0% of Ferro Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for OM Group and Ferro Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OM Group 0 0 0 0 N/A
Ferro Corporation 0 0 4 0 3.00

Ferro Corporation has a consensus price target of $20.75, indicating a potential upside of 8.19%. Given Ferro Corporation’s higher probable upside, analysts plainly believe Ferro Corporation is more favorable than OM Group.

Summary

Ferro Corporation beats OM Group on 7 of the 8 factors compared between the two stocks.

About OM Group

OM Group, Inc. is a United States-based industrial company. The Company is engaged in serving global markets, including automotive systems, electronic devices, aerospace and defense, industrial and medical. It operates in three business segments: Magnetic Technologies, Battery Technologies and Specialty Chemicals. Its Magnetic Technologies segment develops, manufactures and distributes industrial-use magnetic materials and related products to an array of end markets, including automotive systems, electrical installation technology, industrial, retail and renewable energy. The Company’s Battery Technologies segment provides batteries, battery management systems, and energetic devices for defense, space and medical markets. The Company’s Specialty Chemicals segment develops, produces and supplies chemicals for electronic applications, industrial applications including coatings, composites and tire, and photomasks used by customers to produce semiconductors and related products.

About Ferro Corporation

Ferro Corporation (Ferro) produces specialty materials that are sold to a range of manufacturers. The Company’s segments include Performance Coatings; Performance Colors and Glass, and Pigments, Powders and Oxides. Its Performance Coatings segment includes Tile Coating Systems and Porcelain Enamel. Its manufacturers make products for various end-use markets. The Company’s products fall into two general categories: functional coatings, which perform specific functions in the manufacturing processes and end products of its customers, and color solutions, which provide aesthetic and performance characteristics to its customers’ products. Its products are used in a range of product applications in markets, including appliances, automobiles, building and renovation, electronics, household furnishings, industrial products and packaging.

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