Comparing Lsb Industries (NYSE:LXU) and Stepan (NYSE:SCL)

Lsb Industries (NYSE:LXU) and Stepan (NYSE:SCL) are both small-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Volatility and Risk

Lsb Industries has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, Stepan has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.

Earnings and Valuation

This table compares Lsb Industries and Stepan”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lsb Industries	$615.21 million	1.70	$24.61 million	$0.63	23.05
Stepan	$2.33 billion	0.48	$46.90 million	($0.62)	-79.08

Stepan has higher revenue and earnings than Lsb Industries. Stepan is trading at a lower price-to-earnings ratio than Lsb Industries, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for Lsb Industries and Stepan, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lsb Industries	0	5	0	0	2.00
Stepan	2	0	0	0	1.00

Lsb Industries currently has a consensus price target of $15.33, suggesting a potential upside of 5.60%. Given Lsb Industries’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Lsb Industries is more favorable than Stepan.

Profitability

This table compares Lsb Industries and Stepan’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lsb Industries	7.16%	8.91%	3.96%
Stepan	-0.61%	2.65%	1.37%

Insider and Institutional Ownership

73.7% of Lsb Industries shares are held by institutional investors. Comparatively, 82.7% of Stepan shares are held by institutional investors. 3.0% of Lsb Industries shares are held by company insiders. Comparatively, 6.6% of Stepan shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Lsb Industries beats Stepan on 8 of the 13 factors compared between the two stocks.

About Lsb Industries

LSB Industries, Inc. engages in the manufacture, marketing, and sale of chemical products. The company provides nitrogen-based fertilizers, such as ammonia, fertilizer grade high density ammonium nitrate (HDAN), and urea ammonia nitrate for fertilizer for corn, pastures, and other crops, as well as nitrogen, phosphorus, and potassium (NPK) fertilizer blends application. It also offers high purity and commercial grade ammonia, high purity ammonium nitrate, sulfuric acids, mixed nitrating acids, carbon dioxide, and diesel exhaust fluids, as well as concentrated, and blended and regular nitric acids for various applications, including semiconductor, nylon, and polyurethane intermediates, ammonium nitrate, and metal processing; chemical feedstocks, emissions abatement, water treatments, and refrigerants; pulp and paper, aluminum, water treatment, metals, and vanadium processing; abatement for diesel vehicles; and food refrigeration, dry ice, and enhanced oil recovery. In addition, the company provides industrial grade and low density ammonium nitrate, and ammonium nitrate for explosives mining, quarries, and other blasting activities. It sells its products through distributors, as well as directly to end customers in the United States and other parts of North America. The company serves to the agricultural, industrial, and mining markets. LSB Industries, Inc. was incorporated in 1968 and is headquartered in Oklahoma City, Oklahoma.

About Stepan

Stepan Company, together with its subsidiaries, produces and sells specialty and intermediate chemicals to other manufacturers for use in various end products worldwide. It operates through three segments: Surfactants, Polymers, and Specialty Products. The Surfactants segment offers surfactants that are used in consumer and industrial cleaning and disinfection products, including detergents for washing clothes, dishes, carpets, and floors and walls, as well as shampoos and body washes; and other applications, such as fabric softeners, germicidal quaternary compounds, disinfectants, and lubricating ingredients. Its surfactants are also used in various applications, including emulsifiers for spreading agricultural products; and industrial applications comprising latex systems, plastics, and composites. The Polymers segment provides polyurethane polyols that are used in the manufacture of rigid foam for thermal insulation in the construction industry, as well as a base raw material for coatings, adhesives, sealants, and elastomers (CASE); polyester resins, including liquid and powdered products, which are used in CASE applications; and phthalic anhydride that is used in unsaturated polyester resins, alkyd resins, and plasticizers for applications in construction materials, as well as components of automotive, boating, and other consumer products. The Specialty Products segment offers flavors, emulsifiers, and solubilizers for use in food, flavoring, nutritional supplement, and pharmaceutical applications. Stepan Company was founded in 1932 and is headquartered in Northbrook, Illinois.