Head to Head Comparison: Chemours (NYSE:CC) versus Stepan (NYSE:SCL)

Stepan (NYSE:SCL) and Chemours (NYSE:CC) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Institutional and Insider Ownership

82.7% of Stepan shares are owned by institutional investors. Comparatively, 76.3% of Chemours shares are owned by institutional investors. 6.6% of Stepan shares are owned by insiders. Comparatively, 0.9% of Chemours shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Stepan pays an annual dividend of $1.58 per share and has a dividend yield of 3.0%. Chemours pays an annual dividend of $0.35 per share and has a dividend yield of 1.4%. Stepan pays out -254.8% of its earnings in the form of a dividend. Chemours pays out -13.3% 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. Stepan has raised its dividend for 57 consecutive years. Stepan is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Stepan and Chemours, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stepan	2	0	0	0	1.00
Chemours	1	6	5	0	2.33

Chemours has a consensus target price of $22.40, indicating a potential downside of 11.39%. Given Chemours’ stronger consensus rating and higher possible upside, analysts clearly believe Chemours is more favorable than Stepan.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stepan	$2.33 billion	0.51	$46.90 million	($0.62)	-83.68
Chemours	$5.81 billion	0.65	-$386.00 million	($2.64)	-9.58

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

Profitability

This table compares Stepan and Chemours’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stepan	-0.61%	2.65%	1.37%
Chemours	-6.82%	52.49%	1.78%

Volatility & Risk

Stepan has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Chemours has a beta of 1.47, meaning that its stock price is 47% more volatile than the S&P 500.

Summary

Chemours beats Stepan on 9 of the 17 factors compared between the two stocks.

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.

About Chemours

The Chemours Company provides performance chemicals in North America, the Asia Pacific, Europe, the Middle East, Africa, and Latin America. It operates through three segments: Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials. The Titanium Technologies segment provides TiO2 pigment under the Ti-Pure brand for delivering whiteness, brightness, opacity, durability, efficiency, and protection in various of applications, such as architectural and industrial coatings, flexible and rigid plastic packaging, polyvinylchloride, laminate papers used for furniture and building materials, coated paper, and coated paperboard used for packaging. The Thermal & Specialized Solutions segment offers of refrigerants, thermal management solutions, propellants, foam blowing agents, and specialty solvents. The Advanced Performance Materials segment products portfolio includes various industrial resins, specialty products, membranes, and coatings for electronics, communications, transportation, wire and cable, energy, oil and gas, and medical, and other applications under the eflon, Viton, Krytox, and Nafion brands. The company sells its products through direct and indirect channels, as well as through a network of resellers and distributors. The Chemours Company was incorporated in 2014 and is headquartered in Wilmington, Delaware.