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

Insider & Institutional Ownership

37.4% of BioAmber shares are owned by institutional investors. Comparatively, 96.6% of Ferro Corporation shares are owned by institutional investors. 8.3% of BioAmber shares are owned by insiders. Comparatively, 2.0% of Ferro Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for BioAmber and Ferro Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BioAmber 0 1 0 0 2.00
Ferro Corporation 0 0 4 0 3.00

BioAmber currently has a consensus price target of $3.00, indicating a potential upside of 766.55%. Ferro Corporation has a consensus price target of $22.00, indicating a potential upside of 12.88%. Given BioAmber’s higher possible upside, research analysts clearly believe BioAmber is more favorable than Ferro Corporation.

Profitability

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

Net Margins Return on Equity Return on Assets
BioAmber -221.82% -56.55% -21.56%
Ferro Corporation 1.06% 35.05% 7.69%

Risk & Volatility

BioAmber has a beta of 2.7, suggesting that its share price is 170% more volatile than the S&P 500. Comparatively, Ferro Corporation has a beta of 2.02, suggesting that its share price is 102% more volatile than the S&P 500.

Valuation and Earnings

This table compares BioAmber and Ferro Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BioAmber $10.54 million 1.22 -$24.98 million ($0.80) -0.43
Ferro Corporation $1.24 billion 1.32 $174.53 million $0.15 129.94

Ferro Corporation has higher revenue and earnings than BioAmber. BioAmber is trading at a lower price-to-earnings ratio than Ferro Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Ferro Corporation beats BioAmber on 10 of the 13 factors compared between the two stocks.

BioAmber Company Profile

BioAmber Inc. (BioAmber), formerly DNP Green Technology, Inc., is an industrial biotechnology company, which produces sustainable chemicals. The Company’s technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstocks into sustainable chemicals that are replacements for petroleum-derived chemicals, which are used in a range of everyday products, including plastics, food additives and personal care products. Its geographical segments include Europe and North America. Its product pipeline includes the derivatives of bio-succinic acid, such as 1,4 Butanediol (1,4 BDO) and tetrahydrofuran (THF), and succinic acid-based polyesters, and C6 building block chemicals, such as adipic acid, caprolactam and hexamethylenediamine (HMDA). Its products are used in various applications, including polyurethanes, resins and coatings, de-icing and coolant solutions, fine chemicals, lubricants, carpets, engineering plastics and artificial leather products.

Ferro Corporation Company Profile

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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