Chemtura (NYSE: CHMT) and Valvoline (NYSE:VVV) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Chemtura and Valvoline, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chemtura 0 0 0 0 N/A
Valvoline 0 5 2 0 2.29

Valvoline has a consensus price target of $25.71, suggesting a potential upside of 2.65%. Given Valvoline’s higher probable upside, analysts clearly believe Valvoline is more favorable than Chemtura.

Earnings & Valuation

This table compares Chemtura and Valvoline’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chemtura N/A N/A N/A ($0.19) -176.32
Valvoline $2.08 billion 2.43 $304.00 million $1.49 16.81

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

Insider and Institutional Ownership

93.1% of Chemtura shares are owned by institutional investors. Comparatively, 92.4% of Valvoline shares are owned by institutional investors. 2.6% of Chemtura shares are owned by company insiders. Comparatively, 0.6% of Valvoline shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Chemtura and Valvoline’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chemtura 5.71% 9.00% 4.02%
Valvoline 14.59% -137.91% 14.86%

Dividends

Valvoline pays an annual dividend of $0.30 per share and has a dividend yield of 1.2%. Chemtura does not pay a dividend. Valvoline pays out 20.1% of its earnings in the form of a dividend.

Summary

Valvoline beats Chemtura on 8 of the 12 factors compared between the two stocks.

Chemtura Company Profile

Chemtura Corporation is a chemical company. The Company is engaged in developing, manufacturing and marketing of engineered industrial specialty chemicals. The Company’s products are sold to industrial manufacturing customers for use as additives, ingredients or intermediates. The Company’s segments are Industrial Performance Products and Industrial Engineered Products. The Industrial Performance Products segment manufactures and markets lubricant additive components, synthetic lubricant base-stocks, synthetic finished fluids, calcium sulfonate specialty greases and phosphate and polyester based fluids, and is also engaged in the development and production of hot cast elastomer pre-polymers. The Industrial Engineered Products segment develops and manufactures bromine and bromine-based products and organometallic compounds. The Company operates in a range of industries, including automotive, building and construction, electronics, lubricants, packaging and transportation.

Valvoline Company Profile

Valvoline Inc. (Valvoline) is engaged in the production and distribution of automotive, commercial and industrial lubricants, and automotive chemicals. The Company operates through three segments: Core North America, Quick Lubes and International. The Core North America segment sells Valvoline, and other branded and private label products in the United States and Canada to both consumers performing their own automotive maintenance, referred to as Do-It-Yourself (DIY) consumers, as well as, to installer customers using Valvoline products to service vehicles owned by Do-It-For-Me (DIFM) consumers. Its Quick Lubes segment services the passenger car and light truck quick lube market through platforms, including its franchised Valvoline Instant Oil Change (VIOC) stores and Express Care. Its International segment sells Valvoline and other branded products through its affiliates, joint ventures, licensees and independent distributors. Its products include All Climate, DuraBlend and MaxLife.

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