Koppers (NYSE:KOP) vs. Shin-Etsu Chemical (OTCMKTS:SHECY) Critical Analysis

Koppers (NYSE:KOP) and Shin-Etsu Chemical (OTCMKTS:SHECY) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, earnings, profitability, valuation, risk, institutional ownership and dividends.

Volatility & Risk

Koppers has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Shin-Etsu Chemical has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Valuation and Earnings

This table compares Koppers and Shin-Etsu Chemical”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koppers	$1.88 billion	0.42	$56.00 million	$3.80	10.88
Shin-Etsu Chemical	$17.10 billion	5.39	$3.15 billion	$0.84	27.64

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

Profitability

This table compares Koppers and Shin-Etsu Chemical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Koppers	4.10%	14.53%	4.20%
Shin-Etsu Chemical	18.50%	10.67%	8.76%

Insider and Institutional Ownership

92.8% of Koppers shares are held by institutional investors. Comparatively, 0.0% of Shin-Etsu Chemical shares are held by institutional investors. 7.3% of Koppers shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Koppers pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Shin-Etsu Chemical pays an annual dividend of $0.23 per share and has a dividend yield of 1.0%. Koppers pays out 9.5% of its earnings in the form of a dividend. Shin-Etsu Chemical pays out 27.4% 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. Koppers has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of current ratings and target prices for Koppers and Shin-Etsu Chemical, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koppers	0	2	2	1	2.80
Shin-Etsu Chemical	0	1	0	0	2.00

Koppers presently has a consensus price target of $52.50, indicating a potential upside of 26.96%. Given Koppers’ stronger consensus rating and higher probable upside, equities analysts clearly believe Koppers is more favorable than Shin-Etsu Chemical.

Summary

Koppers beats Shin-Etsu Chemical on 10 of the 18 factors compared between the two stocks.

About Koppers

Koppers Holdings Inc. provides treated wood products, wood preservation chemicals, and carbon compounds in the United States, Australasia, Europe, and internationally. The company operates through Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC), and Carbon Materials and Chemicals (CMC) segments. The RUPS segment procures and treats crossties, switch ties, and various types of lumber used for railroad bridges and crossings. It also provides rail joint bars to join rails together for railroads; transmission and distribution poles for electric and telephone utilities; and pilings. This segment provides railroad services, such as engineering, design, repair, and inspection services for railroad bridges. The PC segment develops, manufactures, and markets copper-based wood preservatives, including micronized copper azole, micronized pigments, alkaline copper quaternary, amine copper azole, and chromated copper arsenate for decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses; and supplies fire-retardant chemicals for pressure treatment of wood primarily in commercial construction. The CMC segment manufactures creosote for the treatment of wood or as a feedstock in the production of carbon black; carbon pitch, a raw material used in the production of aluminum and steel; naphthalene for use as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete; phthalic anhydride for the production of plasticizers, polyester resins, and alkyd paints; and carbon black feedstock for use in the production of carbon black. It serves the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber, and construction sectors. Koppers Holdings Inc. was founded in 1988 and is based in Pittsburgh, Pennsylvania.

About Shin-Etsu Chemical

Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.