Financial Contrast: Kraton Corporation (KRA) and Rayonier Advanced Materials (RYAM)
Kraton Corporation (NYSE: KRA) and Rayonier Advanced Materials (NYSE:RYAM) are both small-cap basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, profitability, institutional ownership, risk, dividends and earnings.
Risk & Volatility
Kraton Corporation has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500. Comparatively, Rayonier Advanced Materials has a beta of 4.29, suggesting that its stock price is 329% more volatile than the S&P 500.
Rayonier Advanced Materials pays an annual dividend of $0.28 per share and has a dividend yield of 2.1%. Kraton Corporation does not pay a dividend. Rayonier Advanced Materials pays out 35.0% of its earnings in the form of a dividend.
Insider and Institutional Ownership
97.8% of Kraton Corporation shares are owned by institutional investors. Comparatively, 93.5% of Rayonier Advanced Materials shares are owned by institutional investors. 5.0% of Kraton Corporation shares are owned by insiders. Comparatively, 2.1% of Rayonier Advanced Materials shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares Kraton Corporation and Rayonier Advanced Materials’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Rayonier Advanced Materials||5.71%||24.17%||3.63%|
This is a summary of current recommendations for Kraton Corporation and Rayonier Advanced Materials, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Rayonier Advanced Materials||0||0||5||0||3.00|
Rayonier Advanced Materials has a consensus target price of $18.80, suggesting a potential upside of 38.34%. Given Rayonier Advanced Materials’ stronger consensus rating and higher probable upside, analysts clearly believe Rayonier Advanced Materials is more favorable than Kraton Corporation.
Earnings and Valuation
This table compares Kraton Corporation and Rayonier Advanced Materials’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Kraton Corporation||$1.85 billion||0.55||$338.62 million||$1.38||23.68|
|Rayonier Advanced Materials||$840.05 million||0.70||$202.73 million||$0.80||16.99|
Kraton Corporation has higher revenue and earnings than Rayonier Advanced Materials. Rayonier Advanced Materials is trading at a lower price-to-earnings ratio than Kraton Corporation, indicating that it is currently the more affordable of the two stocks.
Rayonier Advanced Materials beats Kraton Corporation on 9 of the 16 factors compared between the two stocks.
About Kraton Corporation
Kraton Corporation, formerly Kraton Performance Polymers, Inc., is a specialty chemicals company. The Company manufactures styrenic block copolymers (SBCs) and other engineered polymers. The Company also produces specialty products primarily derived from pine wood pulping co-products. The Company operates through two segments: Polymer Segment, which comprises SBCs and other engineered polymers business, and Chemical Segment, which comprises pine-based specialty products business. Its SBCs are used in a range of applications, including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing and footwear products. The Company also sells isoprene rubber (IR) and isoprene rubber latex (IRL), which are non-SBC products primarily used in applications, such as medical products, personal care, adhesives, tackifiers, paints and coatings. It offers crude tall oil (CTO) and crude sulfate turpentine (CST).
About Rayonier Advanced Materials
Rayonier Advanced Materials Inc. is engaged in the production of cellulose specialties. The Company’s product lines include cellulose specialties and commodity products. Its products are used in manufacturing processes. The Company’s products are sold throughout the world to companies for use in various industrial applications, and to produce a range of products, including cigarette filters, foods, pharmaceuticals, textiles and electronics. The Company focuses on producing various forms of cellulose specialties products, such as cellulose acetate and cellulose ethers. The Company’s production facilities are located in Jesup, Georgia and Fernandina Beach, Florida. The Jesup plant can produce cellulose specialties or commodity products using both hardwood and softwood in a pre-hydrolyzed kraft or high potential of hydrogen (pH) cooking process. The Fernandina Beach plant can produce cellulose specialties or commodity products using softwood in a sulfite or low pH cooking process.
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