Ingevity (NYSE: NGVT) and Verenium (NASDAQ:VRNM) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.

Profitability

This table compares Ingevity and Verenium’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ingevity 9.86% 58.14% 12.09%
Verenium N/A N/A N/A

Insider & Institutional Ownership

91.1% of Ingevity shares are owned by institutional investors. 0.1% of Ingevity shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Ingevity and Verenium’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ingevity $908.30 million 3.39 $35.20 million $2.24 32.66
Verenium N/A N/A N/A ($1.56) -2.56

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

Analyst Recommendations

This is a summary of current ratings and target prices for Ingevity and Verenium, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ingevity 0 0 5 0 3.00
Verenium 0 0 0 0 N/A

Ingevity currently has a consensus target price of $79.20, indicating a potential upside of 8.26%. Given Ingevity’s higher probable upside, equities research analysts clearly believe Ingevity is more favorable than Verenium.

Summary

Ingevity beats Verenium on 10 of the 10 factors compared between the two stocks.

Ingevity Company Profile

Ingevity Corporation is a manufacturer of specialty chemicals and high performance carbon materials. The Company is also a manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. The Company operates through two segments: Performance Materials and Performance Chemicals. The Performance Materials segment primarily produces automotive carbon products used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. The Performance Chemicals segment develops, manufactures and sells a range of specialty chemicals primarily derived from co-products of the Kraft pulping process. Its products are used in a range of applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks and automotive components that reduce gasoline vapor emissions.

Verenium Company Profile

Verenium Corporation (Verenium) is an industrial biotechnology company. The Company develops and commercializes enzymes for use in a range of industrial processes. It manufactures and markets its enzyme products in the fields of animal health and nutrition, grain processing, oilfield services and other industrial processes, such as pulp and paper and textiles. As of December 31, 2012, it marketed commercial enzyme products, either independently or in collaboration with its partners. In addition, it has developed a pipeline of enzyme product candidates. Its products are organized into four product lines: animal health and nutrition, grain processing, oilfield services and other industrial processes. As of December 31, 2012, it markets nine commercial enzyme products. In October 2013, BASF SE acquired 71% stake in the Company.

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