Innophos (NASDAQ: IPHS) and Innospec (NASDAQ:IOSP) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.
Volatility & Risk
Innophos has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, Innospec has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.
This table compares Innophos and Innospec’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Innophos||$722.02 million||1.11||$22.44 million||$2.46||16.75|
|Innospec||$1.31 billion||1.33||$61.80 million||$4.66||15.09|
Innospec has higher revenue and earnings than Innophos. Innospec is trading at a lower price-to-earnings ratio than Innophos, indicating that it is currently the more affordable of the two stocks.
Innophos pays an annual dividend of $1.92 per share and has a dividend yield of 4.7%. Innospec pays an annual dividend of $0.78 per share and has a dividend yield of 1.1%. Innophos pays out 78.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Innospec pays out 16.7% of its earnings in the form of a dividend.
This is a breakdown of recent recommendations and price targets for Innophos and Innospec, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Innospec has a consensus price target of $65.00, suggesting a potential downside of 7.54%. Given Innospec’s higher probable upside, analysts clearly believe Innospec is more favorable than Innophos.
Insider & Institutional Ownership
93.3% of Innophos shares are owned by institutional investors. Comparatively, 90.8% of Innospec shares are owned by institutional investors. 2.3% of Innophos shares are owned by company insiders. Comparatively, 2.0% of Innospec shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Innophos and Innospec’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Innospec beats Innophos on 10 of the 15 factors compared between the two stocks.
Innophos Holdings, Inc. is an international producer of specialty ingredient solutions that deliver for the food, health, nutrition and industrial markets. The Company’s segments include Food, Health and Nutrition, Industrial Specialties and Other. It offers a range of product categories, such as asphalt, catalyst, fertilizer salts, liquid phosphate, phosphate salt, phosphoric acid, polyphosphoric acid, sodium bicarbonate, and food blends. The Company is blends and formulates phosphate, mineral and botanical-based ingredients to help its customers offer products that are tasty, healthy, nutritious and economical. The Company, through its subsidiaries, Novel Ingredients, LLC and NutraGenesis LLC, is expanding its food, health and nutrition platform. The Company has manufacturing operations across the United States, in Canada, Mexico and China.
Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals for use as fuel additives, ingredients for personal care, home care, agrochemical, mining and other applications, and oilfield chemicals worldwide. It operates through four segments: Fuel Specialties, Performance Chemicals, Oilfield Services, and Octane Additives. The Fuel Specialties segment offers a range of specialty chemical products used as additives in various fuels. This segment's products are used in the operation of automotive, marine, and aviation engines; power station generators; and heating oil. The Performance Chemicals segment provides technology-based solutions for its customers' processes or products focused in the personal care, home care, agrochemical, and mining markets. The Oilfield Services segment develops and markets products to prevent loss of mud in drilling operations; chemical solutions for fracturing, stimulation, and completion operations; and products for oil and gas production, which enable flow assurance and asset integrity. The Octane Additives segment produces and sells tetra ethyl lead (TEL) for use in automotive gasoline. This segment is also involved in an environmental remediation business that manages the cleanup of redundant TEL plants. The company serves oil and gas exploration and production companies, oil refineries, fuel manufacturers and users, formulators of personal care and home care, agrochemical and mining formulations, and other chemical and industrial companies. The company was formerly known as Octel Corp. and changed its name to Innospec Inc. in January 2006. Innospec Inc. was founded in 1938 and is headquartered in Englewood, Colorado.
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