AdvanSix (NYSE: ASIX) and KMG Chemicals (NYSE:KMG) are both small-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Dividends

KMG Chemicals pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. AdvanSix does not pay a dividend. KMG Chemicals pays out 6.3% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares AdvanSix and KMG Chemicals’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AdvanSix $1.19 billion 0.89 $34.14 million $1.58 22.11
KMG Chemicals $333.44 million 2.67 $23.63 million $1.91 30.28

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

Insider & Institutional Ownership

71.9% of AdvanSix shares are owned by institutional investors. Comparatively, 55.8% of KMG Chemicals shares are owned by institutional investors. 2.7% of AdvanSix shares are owned by insiders. Comparatively, 6.1% of KMG Chemicals shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for AdvanSix and KMG Chemicals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AdvanSix 0 0 1 0 3.00
KMG Chemicals 0 1 2 0 2.67

AdvanSix presently has a consensus target price of $46.00, suggesting a potential upside of 31.69%. KMG Chemicals has a consensus target price of $71.50, suggesting a potential upside of 23.64%. Given AdvanSix’s stronger consensus rating and higher possible upside, equities research analysts clearly believe AdvanSix is more favorable than KMG Chemicals.

Risk & Volatility

AdvanSix has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, KMG Chemicals has a beta of 0.35, meaning that its share price is 65% less volatile than the S&P 500.

Profitability

This table compares AdvanSix and KMG Chemicals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AdvanSix 3.64% 20.30% 5.64%
KMG Chemicals 6.46% 15.41% 6.24%

AdvanSix Company Profile

AdvanSix Inc. is an integrated manufacturer of Nylon 6. The Company also sells a variety of other products, all of which are produced as part of the Nylon 6 resin manufacturing process primarily, including caprolactam, ammonium sulfate fertilizers and other chemical intermediates. The Company operates primarily through its integrated manufacturing sites located in Frankford, Pennsylvania, Hopewell, Virginia, and Chesterfield, Virginia. The Company offers ammonium sulfate, which is used by customers as a nitrogen-based fertilizer. It produces ammonium sulfate fertilizer as part of its manufacturing process. The Company manufactures ammonium sulfate fertilizers including Sulf-N and Sulf-N 26. The Company provides AdvanSix Aegis nylon resins and Aegis barrier nylon resins. Its nylon resins are a preferred choice in food, liquid, and consumer packaging along with mono/multifilament products, carpet fibers, automotive compounding and more. It offers Capran biaxially oriented nylon films.

KMG Chemicals Company Profile

KMG Chemicals, Inc. manufactures, formulates and globally distributes specialty chemicals. The Company operates businesses selling electronic chemicals, industrial wood treating chemicals, and industrial valve lubricants and sealants. The Company operates through two segments: Electronic chemicals and Other chemicals. The Company operates through its subsidiaries, KMG Electronic Chemicals, Inc. (KMG EC), KMG-Bernuth, Inc. (KMG Bernuth) and KMG Val-Tex, LLC (Val-Tex). The Company’s Electronic chemicals business sells high purity and ultra-purity wet process chemicals primarily to the semiconductor industry. The Company’s Other chemicals segment includes its industrial lubricants business and wood treating chemicals business. The Company’s products sulfuric, phosphoric, nitric and hydrofluoric acids, ammonium hydroxide, hydrogen peroxide, isopropyl alcohol, other specialty organic solvents and various blends of chemicals.

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