Brenntag AG, Muehleim/Ruhr (OTCMKTS: BNTGY) and Versum Materials (NYSE:VSM) are both mid-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitability, institutional ownership and risk.

Dividends

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Brenntag AG, Muehleim/Ruhr pays an annual dividend of $0.15 per share and has a dividend yield of 1.3%. Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Brenntag AG, Muehleim/Ruhr pays out 26.3% of its earnings in the form of a dividend. Versum Materials pays out 13.6% 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.

Volatility & Risk

Brenntag AG, Muehleim/Ruhr has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Versum Materials has a beta of 0.22, suggesting that its share price is 78% less volatile than the S&P 500.

Valuation and Earnings

This table compares Brenntag AG, Muehleim/Ruhr and Versum Materials’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brenntag AG, Muehleim/Ruhr $11.62 billion 0.78 $398.70 million $0.57 20.59
Versum Materials $1.13 billion 3.69 $193.00 million $1.47 25.96

Brenntag AG, Muehleim/Ruhr has higher revenue and earnings than Versum Materials. Brenntag AG, Muehleim/Ruhr is trading at a lower price-to-earnings ratio than Versum Materials, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Brenntag AG, Muehleim/Ruhr and Versum Materials, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brenntag AG, Muehleim/Ruhr 0 1 0 0 2.00
Versum Materials 0 2 5 0 2.71

Versum Materials has a consensus price target of $37.00, suggesting a potential downside of 3.04%. Given Versum Materials’ stronger consensus rating and higher possible upside, analysts plainly believe Versum Materials is more favorable than Brenntag AG, Muehleim/Ruhr.

Profitability

This table compares Brenntag AG, Muehleim/Ruhr and Versum Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brenntag AG, Muehleim/Ruhr 3.49% 13.46% 5.36%
Versum Materials 13.55% 6,666.66% 17.66%

Institutional & Insider Ownership

0.1% of Brenntag AG, Muehleim/Ruhr shares are owned by institutional investors. Comparatively, 92.1% of Versum Materials shares are owned by institutional investors. 0.5% of Versum Materials shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Versum Materials beats Brenntag AG, Muehleim/Ruhr on 11 of the 16 factors compared between the two stocks.

Brenntag AG, Muehleim/Ruhr Company Profile

Brenntag AG, a chemical distribution company, provides distribution solutions for industrial and specialty chemicals worldwide. The company also provides value added services. It serves customers in various end-market industries, such as adhesives, paints, oil and gas, food, water treatment, personal care, and pharmaceuticals. The company was founded in 1874 and is headquartered in Mülheim an der Ruhr, Germany.

Versum Materials Company Profile

Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.

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