Kraton Corporation (NYSE: KRA) and OCI Partners (NYSE:OCIP) are both small-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, risk, institutional ownership, earnings, profitability and analyst recommendations.

Profitability

This table compares Kraton Corporation and OCI Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kraton Corporation 1.27% 14.19% 2.56%
OCI Partners -5.60% -10.52% -2.53%

Dividends

OCI Partners pays an annual dividend of $0.48 per share and has a dividend yield of 6.9%. Kraton Corporation does not pay a dividend. OCI Partners pays out -252.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations for Kraton Corporation and OCI Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kraton Corporation 0 1 2 0 2.67
OCI Partners 1 0 0 0 1.00

Kraton Corporation currently has a consensus price target of $60.00, suggesting a potential upside of 19.50%. OCI Partners has a consensus price target of $7.00, suggesting a potential upside of 0.00%. Given Kraton Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Kraton Corporation is more favorable than OCI Partners.

Valuation and Earnings

This table compares Kraton Corporation and OCI Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Kraton Corporation $1.74 billion 0.90 $107.30 million $0.76 66.07
OCI Partners $258.23 million 2.36 -$50.55 million ($0.19) -36.84

Kraton Corporation has higher revenue and earnings than OCI Partners. OCI Partners is trading at a lower price-to-earnings ratio than Kraton Corporation, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

95.5% of Kraton Corporation shares are held by institutional investors. Comparatively, 15.0% of OCI Partners shares are held by institutional investors. 5.0% of Kraton Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Kraton Corporation has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500. Comparatively, OCI Partners has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500.

Summary

Kraton Corporation beats OCI Partners on 11 of the 15 factors compared between the two stocks.

Kraton Corporation 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).

OCI Partners Company Profile

OCI Partners LP owns and operates an integrated methanol and ammonia production facility that is located on the Texas Gulf Coast near Beaumont. The Company has an annual methanol production capacity of approximately 912,500 metric tons and an annual ammonia production capacity of approximately 331,000 metric tons. It purchases natural gas from third parties and processes the natural gas into synthesis gas, which it then further processes in the production of methanol and ammonia. It stores and sells the processed methanol and ammonia to industrial and commercial customers for further processing or distribution. Its methanol production unit comprises Foster-Wheeler-designed twin steam methane reformers for synthesis gas production, over two Lurgi-designed parallel low-pressure, water-cooled reactors and approximately four distillation columns. The Haldor-Topsoe-designed ammonia synthesis loop at its facility processes hydrogen produced by methanol production process.

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