Calgon Carbon (NYSE: CCC) and Praxair (NYSE:PX) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Earnings & Valuation

This table compares Calgon Carbon and Praxair’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Calgon Carbon $514.25 million 2.13 $13.79 million $0.11 196.36
Praxair $10.53 billion 4.16 $1.50 billion $5.62 27.20

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Calgon Carbon and Praxair, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Calgon Carbon 1 3 0 0 1.75
Praxair 2 6 7 0 2.33

Calgon Carbon currently has a consensus price target of $19.63, indicating a potential downside of 9.14%. Praxair has a consensus price target of $152.82, indicating a potential downside of 0.04%. Given Praxair’s stronger consensus rating and higher possible upside, analysts clearly believe Praxair is more favorable than Calgon Carbon.

Institutional & Insider Ownership

83.1% of Calgon Carbon shares are held by institutional investors. Comparatively, 84.8% of Praxair shares are held by institutional investors. 2.3% of Calgon Carbon shares are held by company insiders. Comparatively, 0.2% of Praxair shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Calgon Carbon and Praxair’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Calgon Carbon 0.97% 5.65% 2.75%
Praxair 14.56% 27.13% 8.34%

Dividends

Calgon Carbon pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Praxair pays an annual dividend of $3.15 per share and has a dividend yield of 2.1%. Calgon Carbon pays out 181.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Praxair pays out 56.0% of its earnings in the form of a dividend. Praxair has increased its dividend for 12 consecutive years. Praxair is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Calgon Carbon has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Praxair has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Summary

Praxair beats Calgon Carbon on 14 of the 17 factors compared between the two stocks.

About Calgon Carbon

Calgon Carbon Corporation is a manufacturer of activated carbon, with capabilities in ultraviolet (UV) light disinfection. The Company provides purification solutions for drinking water, wastewater, pollution abatement, and a range of industrial and commercial manufacturing processes. The Company operates through four segments: Activated Carbon and Service, Equipment, Consumer and Other. The Company’s products and services are designed to protect human health and the environment from harmful contaminants in water, and air. The Company provides purification solutions for drinking water, wastewater, pollution abatement, and a range of industrial and commercial manufacturing processes. The Company operates in the United States, Europe, Japan, Africa, Canada, China, India, Latin America, and in other parts of Asia.

About Praxair

Praxair, Inc. is an industrial gas company. The Company’s operations are organized into five segments, four of which have been determined on a geographic basis of segmentation: North America, Europe, South America and Asia. In addition, it operates its surface technologies business through its subsidiary, Praxair Surface Technologies, Inc., which represents the fifth segment. Its operations consist of two product lines: industrial gases and surface technologies. Its industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases). It also designs, engineers and builds equipment that produces industrial gases primarily for internal use. Its Surface Technologies segment, operated through Praxair Surface Technologies, Inc., supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders.

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