H. B. Fuller (NYSE:FUL) versus Axalta Coating Systems (NYSE:AXTA) Critical Review

Axalta Coating Systems (NYSE:AXTA) and H. B. Fuller (NYSE:FUL) are both mid-cap materials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.

Analyst Recommendations

This is a summary of recent ratings and price targets for Axalta Coating Systems and H. B. Fuller, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Axalta Coating Systems	0	8	5	0	2.38
H. B. Fuller	0	3	4	1	2.75

Axalta Coating Systems presently has a consensus price target of $37.58, indicating a potential upside of 15.23%. H. B. Fuller has a consensus price target of $64.62, indicating a potential upside of 30.26%. Given H. B. Fuller’s stronger consensus rating and higher probable upside, analysts plainly believe H. B. Fuller is more favorable than Axalta Coating Systems.

Insider & Institutional Ownership

98.3% of Axalta Coating Systems shares are held by institutional investors. Comparatively, 95.9% of H. B. Fuller shares are held by institutional investors. 0.5% of Axalta Coating Systems shares are held by insiders. Comparatively, 1.8% of H. B. Fuller shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Axalta Coating Systems and H. B. Fuller”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Axalta Coating Systems	$5.12 billion	1.36	$378.00 million	$1.62	20.13
H. B. Fuller	$3.47 billion	0.77	$151.97 million	$3.59	13.82

Axalta Coating Systems has higher revenue and earnings than H. B. Fuller. H. B. Fuller is trading at a lower price-to-earnings ratio than Axalta Coating Systems, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Axalta Coating Systems has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, H. B. Fuller has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Profitability

This table compares Axalta Coating Systems and H. B. Fuller’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Axalta Coating Systems	6.78%	22.35%	7.12%
H. B. Fuller	5.56%	12.65%	4.97%

Summary

Axalta Coating Systems beats H. B. Fuller on 10 of the 15 factors compared between the two stocks.

About Axalta Coating Systems

Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high-performance coatings systems in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through two segments, Performance Coatings and Mobility Coatings. It also offers water and solvent-borne products and systems to repair damaged vehicles for independent body shops, multi-shop operators, and original equipment manufacturer (OEM) dealership body shops. In addition, the company provides functional and decorative liquid, and powder coatings used in various industrial applications, including building materials, cabinet, wood and luxury vinyl flooring and furniture market under the Voltatex, AquaEC, Durapon, Hydropon, UNRIVALED, Ceranamel, Industrial, Corlar Industrial, Tufcote, Imron Industrial, Alesta, Teodur, Nap-Gard, Abcite, and Plascoat brands for powder coatings. Further, it develops and supplies electrocoat, primer, the basecoat, and clearcoat products for OEMs of light and commercial vehicles; and coatings systems for various commercial applications, including HDT, MDT, bus, and rail under the Imron, Imron Elite, Centari, Rival, Corlar epoxy undercoats, and AquaEC brands. The company offers products under the Audurra, Abcite, Alesta, AquaEC, Centari, Ceranamel, Challenger, Chemophan, ColorNet, Cromax, Cromax Mosaic, Durapon 70, Duxone, Harmonized Coating Technologies, Imron ExcelPro, Lutophen, Nason, Spies Hecker, Standox, Stollaquid, Syntopal, Syrox, Raptor, U-POL, and Vermeera brand names. The company was formerly known as Axalta Coating Systems Bermuda Co., Ltd. and changed its name to Axalta Coating Systems Ltd. in August 2014. Axalta Coating Systems Ltd. was founded in 1866 and is headquartered in Glen Mills, Pennsylvania.

About H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.