Ferro (NYSE: FOE) and OCI Partners (NYSE:OCIP) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Dividends

OCI Partners pays an annual dividend of $0.32 per share and has a dividend yield of 3.7%. Ferro does not pay a dividend. OCI Partners pays out -533.3% of its earnings in the form of a dividend.

Volatility & Risk

Ferro has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500. Comparatively, OCI Partners has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Ferro and OCI Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ferro 0 0 4 0 3.00
OCI Partners 0 1 0 0 2.00

Ferro currently has a consensus target price of $23.00, indicating a potential downside of 4.60%. OCI Partners has a consensus target price of $7.00, indicating a potential downside of 20.00%. Given Ferro’s stronger consensus rating and higher possible upside, equities analysts plainly believe Ferro is more favorable than OCI Partners.

Profitability

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

Net Margins Return on Equity Return on Assets
Ferro 3.44% 35.77% 7.57%
OCI Partners -1.79% -3.70% -0.86%

Institutional and Insider Ownership

97.3% of Ferro shares are held by institutional investors. Comparatively, 15.0% of OCI Partners shares are held by institutional investors. 2.0% of Ferro shares are held 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.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ferro $1.15 billion 1.77 -$20.81 million $0.52 46.37
OCI Partners $258.23 million 2.95 -$50.55 million ($0.06) -145.83

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

Summary

Ferro beats OCI Partners on 13 of the 16 factors compared between the two stocks.

About Ferro

Ferro Corporation (Ferro) produces specialty materials that are sold to a range of manufacturers. The Company’s segments include Performance Coatings (metal and ceramic coatings), Performance Colors and Glass (glass coatings), and Color Solutions. Its Performance Coatings segment includes Tile Coating Systems and Porcelain Enamel. Its manufacturers make products for various end-use markets. The Company’s products fall into two general categories: functional coatings, which perform specific functions in the manufacturing processes and end products of its customers, and color solutions, which provide aesthetic and performance characteristics to its customers’ products. Its products are used in a range of product applications in markets, including appliances, automobiles, building and renovation, electronics, household furnishings, industrial products and packaging.

About OCI Partners

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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