Contrasting H. B. Fuller (NYSE:FUL) and Sensient Technologies (NYSE:SXT)

H. B. Fuller (NYSE:FUL) and Sensient Technologies (NYSE:SXT) are both mid-cap basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.

Insider and Institutional Ownership

95.9% of H. B. Fuller shares are owned by institutional investors. Comparatively, 90.9% of Sensient Technologies shares are owned by institutional investors. 2.0% of H. B. Fuller shares are owned by insiders. Comparatively, 1.2% of Sensient Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

H. B. Fuller has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, Sensient Technologies has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for H. B. Fuller and Sensient Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
H. B. Fuller	1	3	2	2	2.63
Sensient Technologies	0	1	2	0	2.67

H. B. Fuller presently has a consensus price target of $65.75, suggesting a potential upside of 11.37%. Sensient Technologies has a consensus price target of $110.00, suggesting a potential upside of 15.46%. Given Sensient Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Sensient Technologies is more favorable than H. B. Fuller.

Profitability

This table compares H. B. Fuller and Sensient Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
H. B. Fuller	3.28%	11.49%	4.24%
Sensient Technologies	8.56%	12.56%	6.60%

Dividends

H. B. Fuller pays an annual dividend of $0.94 per share and has a dividend yield of 1.6%. Sensient Technologies pays an annual dividend of $1.64 per share and has a dividend yield of 1.7%. H. B. Fuller pays out 50.8% of its earnings in the form of a dividend. Sensient Technologies pays out 51.7% 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. H. B. Fuller has increased its dividend for 57 consecutive years.

Valuation and Earnings

This table compares H. B. Fuller and Sensient Technologies”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
H. B. Fuller	$3.57 billion	0.89	$130.26 million	$1.85	31.91
Sensient Technologies	$1.56 billion	2.60	$124.67 million	$3.17	30.05

H. B. Fuller has higher revenue and earnings than Sensient Technologies. Sensient Technologies is trading at a lower price-to-earnings ratio than H. B. Fuller, indicating that it is currently the more affordable of the two stocks.

Summary

H. B. Fuller beats Sensient Technologies on 9 of the 17 factors compared between the two stocks.

About H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.

About Sensient Technologies

Sensient Technologies Corporation, together with its subsidiaries, develops, manufactures, and markets colors, flavors, and other specialty ingredients in North America, Europe, Asia, Australia, South America, and Africa. The company offers flavor-delivery systems, and compounded and blended products; ingredient products, such as essential oils, natural and synthetic flavors, and natural extracts; and chili powder, paprika, and chili pepper, as well as dehydrated vegetables comprising parsley, celery, and spinach to the food, beverage, and personal care industries. It also provides natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, including colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications under the Sensient Food Colors, Sensient Pharmaceutical Coating Systems, Sensient Cosmetic Technologies, and Sensient Specialty Markets trade names. Sensient Technologies Corporation was incorporated in 1882 and is headquartered in Milwaukee, Wisconsin.