Comparing Basf (OTCMKTS:BASFY) and Mosaic (NYSE:MOS)

Mosaic (NYSE:MOS) and Basf (OTCMKTS:BASFY) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, dividends, risk, institutional ownership, valuation, profitability and analyst recommendations.

Insider and Institutional Ownership

77.5% of Mosaic shares are owned by institutional investors. Comparatively, 0.0% of Basf shares are owned by institutional investors. 0.3% of Mosaic shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Mosaic and Basf, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mosaic	3	12	7	0	2.18
Basf	1	3	4	1	2.56

Mosaic presently has a consensus target price of $27.17, suggesting a potential upside of 10.79%. Given Mosaic’s higher probable upside, research analysts plainly believe Mosaic is more favorable than Basf.

Valuation and Earnings

This table compares Mosaic and Basf”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mosaic	$12.25 billion	0.64	$540.70 million	($2.02)	-12.14
Basf	$67.48 billion	0.79	$1.83 billion	$1.94	7.65

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

Dividends

Mosaic pays an annual dividend of $0.88 per share and has a dividend yield of 3.6%. Basf pays an annual dividend of $0.47 per share and has a dividend yield of 3.2%. Mosaic pays out -43.6% of its earnings in the form of a dividend. Basf pays out 24.2% 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. Mosaic has raised its dividend for 7 consecutive years. Mosaic is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Mosaic and Basf’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mosaic	-5.21%	3.77%	1.87%
Basf	9.40%	5.66%	2.51%

Risk and Volatility

Mosaic has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, Basf has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.

Summary

Basf beats Mosaic on 10 of the 18 factors compared between the two stocks.

About Mosaic

The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients in North America and internationally. The company operates through three segments: Phosphates, Potash, and Mosaic Fertilizantes. It owns and operates mines, which produce concentrated phosphate crop nutrients, such as diammonium phosphate, monoammonium phosphate, and ammoniated phosphate products; and phosphate-based animal feed ingredients primarily under the Biofos and Nexfos brand names, as well as produces a double sulfate of potash magnesia product under K-Mag brand name. The company also produces and sells potash for use in the manufacturing of mixed crop nutrients and animal feed ingredients, and for industrial use; and for use in the de-icing and as a water softener regenerant. In addition, it provides nitrogen-based crop nutrients, animal feed ingredients, and other ancillary services; and purchases and sells phosphates, potash, and nitrogen products. The company sells its products to wholesale distributors, retail chains, farmers, cooperatives, independent retailers, and national accounts. The company was incorporated in 2004 and is headquartered in Tampa, Florida.

About Basf

BASF SE operates as a chemical company worldwide. It operates through six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Agricultural Solutions. The Chemicals segment provides petrochemicals and intermediates. The Materials segment offers advanced materials and their precursors for applications and systems comprising isocyanates, polyamides, and inorganic basic products, as well as specialties for plastics and plastics processing industries. The Industrial Solutions segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, resins, additives, electronic materials, and antioxidants for automotive, plastics, paints and coatings, electronics, and energy and resource industries. The Surface Technologies segment provides automotive OEM and refinish coatings, surface treatment, catalysts, battery materials, and precious and base metal services for the automotive and chemical sectors. The Nutrition & Care segment offers ingredients for consumer goods in the areas of nutrition, home, personal care, and technical applications; and serves the food and feed producers, pharmaceutical, cosmetics, detergents, cleaners, and crop protection industries, as well as fast-moving consumer goods sector. The Agricultural Solutions segment provides seeds and seed treatment products; fungicides, herbicides, insecticides, and biological crop protection products; and digital farming solutions. The company engages in engineering and other; rental and leasing; and commodity trading activities. BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany.