Valvoline (NYSE: VVV) and Quaker Chemical (NYSE:KWR) are both mid-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.
This table compares Valvoline and Quaker Chemical’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valvoline has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.Comparatively, Quaker Chemical has a beta of 1.3, suggesting that its share price is 30% more volatile than the S&P 500.
Insider & Institutional Ownership
95.5% of Valvoline shares are held by institutional investors. Comparatively, 92.2% of Quaker Chemical shares are held by institutional investors. 0.1% of Valvoline shares are held by insiders. Comparatively, 3.2% of Quaker Chemical shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Valvoline and Quaker Chemical’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Valvoline||$2.08 billion||2.10||$304.00 million||$1.39||15.76|
|Quaker Chemical||$820.08 million||2.49||$20.27 million||$5.01||30.61|
Valvoline has higher revenue and earnings than Quaker Chemical. Valvoline is trading at a lower price-to-earnings ratio than Quaker Chemical, indicating that it is currently the more affordable of the two stocks.
Valvoline pays an annual dividend of $0.30 per share and has a dividend yield of 1.4%. Quaker Chemical pays an annual dividend of $1.42 per share and has a dividend yield of 0.9%. Valvoline pays out 21.6% of its earnings in the form of a dividend. Quaker Chemical pays out 28.3% 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. Quaker Chemical has increased its dividend for 8 consecutive years. Valvoline is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a summary of recent recommendations for Valvoline and Quaker Chemical, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Valvoline currently has a consensus target price of $25.67, suggesting a potential upside of 17.20%. Quaker Chemical has a consensus target price of $162.00, suggesting a potential upside of 5.64%. Given Valvoline’s stronger consensus rating and higher probable upside, equities analysts clearly believe Valvoline is more favorable than Quaker Chemical.
Valvoline beats Quaker Chemical on 10 of the 17 factors compared between the two stocks.
Valvoline Inc. manufactures and markets engine and automotive maintenance products and services. It operates through three segments: Core North America, Quick Lubes, and International. The company offers lubricants for passenger car/light duty and heavy duty; antifreeze/coolants for original equipment manufacturers; functional and maintenance chemicals, such as brake fluids and power steering fluids, as well as specialty coatings for automotive and industrial applications comprising rust prevention and sound absorption; and oil and air filters for light-duty vehicles. It also provides windshield wiper blades, light bulbs, serpentine belts, and drain plugs. Valvoline Inc. sells its products through approximately 1,100 Valvoline branded franchised and company-owned stores. The company also serves car dealers, general repair shops, and third-party quick lube locations. It has operations in North America, Europe, the Asia Pacific, Latin America, and other countries. Valvoline Inc. was founded in 1866 and is headquartered in Lexington, Kentucky.
About Quaker Chemical
Quaker Chemical Corporation develops, produces, and markets various formulated chemical specialty products for a range of heavy industrial and manufacturing applications in North America, Europe, the Middle East, Africa, the Asia/Pacific, and South America. Its products include rolling lubricants used by manufacturers of steel in the hot and cold rolling of steel, and aluminum in the hot rolling of aluminum; machining and grinding compounds for use in cutting, shaping, and grinding metal parts; hydraulic fluids for steel, metalworking, and other customers to operate hydraulic equipment; corrosion preventives to protect metals during manufacture, storage, and shipment; and specialty greases used in automotive and aerospace production processes, steel manufacturing, and various other applications. The company also provides metal finishing compounds to prepare metal surfaces for special treatments, such as galvanizing and tin plating, as well as to prepare metal for further processing; forming compounds used to facilitate the drawing and extrusion of metal products; chemical milling maskants for the aerospace industry; and temporary and permanent coatings for metal and concrete products. In addition, it offers construction products comprising flexible sealants and protective coatings for various applications; bio-lubricants used in machinery in forestry and construction industries; and die casting lubricants, as well as provides chemical management services. The company serves steel, aluminum, automotive, mining, aerospace, tube and pipe, cans, and other industries. Quaker Chemical Corporation markets and sells its products directly, as well as through distributors and agents. The company was formerly known as Quaker Chemical Products Corporation and changed its name to Quaker Chemical Corporation in August 1962. Quaker Chemical Corporation was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.
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