Analyzing Kraton (KRA) & Huntsman (HUN)
Kraton (NYSE: KRA) and Huntsman (NYSE:HUN) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.
This table compares Kraton and Huntsman’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and target prices for Kraton and Huntsman, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Kraton currently has a consensus price target of $60.00, indicating a potential upside of 26.66%. Huntsman has a consensus price target of $33.10, indicating a potential upside of 4.42%. Given Kraton’s higher possible upside, equities analysts clearly believe Kraton is more favorable than Huntsman.
Earnings and Valuation
This table compares Kraton and Huntsman’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kraton||$1.74 billion||0.85||$107.30 million||$0.76||62.33|
|Huntsman||$9.66 billion||0.79||$326.00 million||$2.13||14.88|
Huntsman has higher revenue and earnings than Kraton. Huntsman is trading at a lower price-to-earnings ratio than Kraton, indicating that it is currently the more affordable of the two stocks.
Huntsman pays an annual dividend of $0.50 per share and has a dividend yield of 1.6%. Kraton does not pay a dividend. Huntsman pays out 23.5% of its earnings in the form of a dividend.
Insider & Institutional Ownership
97.5% of Kraton shares are held by institutional investors. Comparatively, 75.5% of Huntsman shares are held by institutional investors. 4.7% of Kraton shares are held by company insiders. Comparatively, 19.0% of Huntsman shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Volatility and Risk
Kraton has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Huntsman has a beta of 2.85, indicating that its stock price is 185% more volatile than the S&P 500.
Huntsman beats Kraton on 11 of the 16 factors compared between the two stocks.
Kraton Company Profile
Kraton Corporation, formerly Kraton Performance Polymers, Inc., is a specialty chemicals company. The Company manufactures styrenic block copolymers (SBCs) and other engineered polymers. The Company also produces specialty products primarily derived from pine wood pulping co-products. The Company operates through two segments: Polymer Segment, which comprises SBCs and other engineered polymers business, and Chemical Segment, which comprises pine-based specialty products business. Its SBCs are used in a range of applications, including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing and footwear products. The Company also sells isoprene rubber (IR) and isoprene rubber latex (IRL), which are non-SBC products primarily used in applications, such as medical products, personal care, adhesives, tackifiers, paints and coatings. It offers crude tall oil (CTO) and crude sulfate turpentine (CST).
Huntsman Company Profile
Huntsman Corporation is a manufacturer of differentiated organic chemical products and of inorganic chemical products. The Company operates all of its businesses through its subsidiary, Huntsman International LLC (Huntsman International). The Company operates through five segments: Polyurethanes, Performance Products, Advanced Materials, Textile Effects, and Pigments and Additives. Its Polyurethanes, Performance Products, Advanced Materials and Textile Effects segments produce differentiated organic chemical products and its Pigments and Additives segment produces inorganic chemical products. The Company’s products are used in a range of applications, including those in the adhesives, aerospace, automotive, construction products, personal care and hygiene, durable and non-durable consumer products, digital inks, electronics, medical, packaging, paints and coatings, power generation, refining, synthetic fiber, textile chemicals and dye industries.
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