Head-To-Head Contrast: Versum Materials (VSM) & Orion Engineered Carbons (OEC)
Versum Materials (NYSE: VSM) and Orion Engineered Carbons (NYSE:OEC) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.
Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Orion Engineered Carbons pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. Versum Materials pays out 11.3% of its earnings in the form of a dividend. Orion Engineered Carbons pays out 68.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Versum Materials has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Orion Engineered Carbons has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.
This table compares Versum Materials and Orion Engineered Carbons’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Orion Engineered Carbons||5.50%||137.36%||8.91%|
This is a breakdown of recent ratings and price targets for Versum Materials and Orion Engineered Carbons, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Orion Engineered Carbons||0||1||4||0||2.80|
Versum Materials currently has a consensus target price of $36.63, indicating a potential downside of 6.40%. Orion Engineered Carbons has a consensus target price of $25.40, indicating a potential downside of 8.14%. Given Versum Materials’ higher possible upside, analysts clearly believe Versum Materials is more favorable than Orion Engineered Carbons.
Valuation & Earnings
This table compares Versum Materials and Orion Engineered Carbons’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Versum Materials||$1.13 billion||3.78||$193.00 million||$1.77||22.11|
|Orion Engineered Carbons||$1.14 billion||1.43||$49.38 million||$1.17||23.63|
Versum Materials has higher earnings, but lower revenue than Orion Engineered Carbons. Versum Materials is trading at a lower price-to-earnings ratio than Orion Engineered Carbons, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
90.3% of Versum Materials shares are held by institutional investors. Comparatively, 54.6% of Orion Engineered Carbons shares are held by institutional investors. 0.5% of Versum Materials shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Versum Materials beats Orion Engineered Carbons on 11 of the 16 factors compared between the two stocks.
Versum Materials Company Profile
Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.
Orion Engineered Carbons Company Profile
Orion Engineered Carbons S.A. is a producer of carbon black. The Company operates through two segments: Specialty Carbon Black and Rubber Carbon Black. The Specialty Carbon Black segment is engaged in the production of specialty carbon black. The Rubber Carbon Black segment is involved in the production of rubber carbon black. As of December 31, 2016, it operated a diversified carbon black business with over 280 specialty carbon black grades and approximately 80 rubber carbon black grades. Carbon black is used as a pigment and as a performance additive in coatings, polymers, printing and special applications (specialty carbon black), and in the reinforcement of rubber in tires and mechanical rubber goods (rubber carbon black). As of December 31, 2016, it operated a global platform of 13 production facilities in Europe, North and South America, Asia and South Africa and three sales companies, as well as one jointly-owned production plant in Germany.
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