Critical Analysis: Nexeo Solutions (NXEO) & Univar (UNVR)
Nexeo Solutions (NASDAQ: NXEO) and Univar (NYSE:UNVR) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Insider and Institutional Ownership
94.1% of Nexeo Solutions shares are owned by institutional investors. Comparatively, 96.7% of Univar shares are owned by institutional investors. 0.1% of Nexeo Solutions shares are owned by company insiders. Comparatively, 1.8% of Univar shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Nexeo Solutions and Univar’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Nexeo Solutions||$3.51 billion||0.19||$151.10 million||$0.12||60.76|
|Univar||$8.06 billion||0.48||$473.50 million||($0.51)||-54.06|
Univar has higher revenue and earnings than Nexeo Solutions. Univar is trading at a lower price-to-earnings ratio than Nexeo Solutions, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Nexeo Solutions and Univar, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Nexeo Solutions currently has a consensus target price of $9.00, indicating a potential upside of 23.46%. Univar has a consensus target price of $32.60, indicating a potential upside of 18.24%. Given Nexeo Solutions’ higher possible upside, equities analysts clearly believe Nexeo Solutions is more favorable than Univar.
This table compares Nexeo Solutions and Univar’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Univar beats Nexeo Solutions on 9 of the 12 factors compared between the two stocks.
Nexeo Solutions Company Profile
Nexeo Solutions Inc, formerly WL Ross Holding Corp., is global distributor of chemicals products in North America and Asia, and plastics products in North America, Europe, the Middle East and Africa (EMEA) and Asia. The Company provides services, such as custom blending, packaging and re-packaging, private-label manufacturing and product testing in the form of chemical analysis, product performance analysis and product development. It also provides environmental services, including waste collection, recovery and arrangement for disposal services and recycling in North America, primarily in the United States, through its Environmental Services line of business. The Company operates in three segments: Chemicals, Plastics and Environmental Services.
Univar Company Profile
Univar Inc. is a distributor of commodity and specialty chemicals. The Company operates through four segments: Univar USA (USA); Univar Canada (Canada); Univar Europe and the Middle East and Africa (EMEA), and Rest of World. The Company’s USA segment supplies a range of commodity and specialty chemicals, as well as services to a range of end markets, including manufacturing and industrial production sectors in the United States. In the United States, it services these multiple end markets with one-to-three day order times from nearby facilities. It repackages and blends bulk chemicals for shipment by its transportation fleet, as well as common carriers. Its Canadian operations are regionally focused, supplying a range of commodity and specialty chemicals to the local customer base. In Eastern Canada, it primarily focuses on industrial markets, such as food ingredients and products, pharmaceutical ingredients and finished products, coatings and adhesives, and chemical manufacturing.
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