Innospec (IOSP) vs. Stepan (SCL) Head to Head Review
Innospec (NASDAQ: IOSP) and Stepan (NYSE:SCL) are both small-cap specialty chemicals – nec companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.
This table compares Innospec and Stepan’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent recommendations for Innospec and Stepan, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Innospec presently has a consensus target price of $65.00, suggesting a potential upside of 4.17%. Stepan has a consensus target price of $36.25, suggesting a potential downside of 55.42%. Given Innospec’s stronger consensus rating and higher possible upside, equities analysts plainly believe Innospec is more favorable than Stepan.
Innospec pays an annual dividend of $0.76 per share and has a dividend yield of 1.2%. Stepan pays an annual dividend of $0.82 per share and has a dividend yield of 1.0%. Innospec pays out 24.2% of its earnings in the form of a dividend. Stepan pays out 21.2% 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 increased its dividend for 49 consecutive years.
Earnings and Valuation
This table compares Innospec and Stepan’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Innospec||$883.40 million||1.71||$81.30 million||$3.14||19.87|
|Stepan||$1.77 billion||1.04||$86.19 million||$3.86||21.06|
Stepan has higher revenue and earnings than Innospec. Innospec is trading at a lower price-to-earnings ratio than Stepan, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
89.1% of Innospec shares are held by institutional investors. Comparatively, 62.1% of Stepan shares are held by institutional investors. 2.0% of Innospec shares are held by company insiders. Comparatively, 13.1% of Stepan shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Risk & Volatility
Innospec has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, Stepan has a beta of 1.28, suggesting that its stock price is 28% more volatile than the S&P 500.
Stepan beats Innospec on 10 of the 18 factors compared between the two stocks.
Innospec Inc. is a specialty chemicals company engaged in developing, manufacturing, blending, marketing and supplying of specialty chemicals for use as fuel additives and ingredients for personal care, home care, agrochemical, mining and other applications and oilfield chemicals. The Company operates through four business segments: Fuel Specialties, Performance Chemicals, Oilfield Services and Octane Additives. Its Fuel Specialties develops, manufactures, blends, markets and supplies various specialty chemical products that are used as additives for a range of fuels. Its Performance Chemicals provides technology-based solutions. Its Oilfield Services business supplies drilling, completion and production chemicals. Its Octane Additives business manufactures a fuel additive for use in automotive gasoline and provides services in respect of environmental remediation. Its customers include oil and gas exploration and production companies, fuel users, and oil refiners among others.
Stepan Company produces specialty and intermediate chemicals, which are sold to other manufacturers and used in a range of end products. The Company operates through three segments: Surfactants, Polymers and Specialty Products. The Company’s principal markets include manufacturers of cleaning and washing compounds (including detergents, shampoos, fabric softeners, toothpastes and household cleaners), paints, cosmetics, food, beverages, nutritional supplements, agricultural products and plastics. Its Surfactants segment offers products, which are principal ingredients in consumer and industrial cleaning products, such as detergents for washing clothes, dishes, carpets, floors and walls, as well as shampoos and body washes. Its Polymers segment includes polyurethane polyols, polyester resins and phthalic anhydride. Its Specialty Products segment includes flavors, emulsifiers and solubilizers used in food, flavoring, nutritional supplement and pharmaceutical applications.
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