Head to Head Review: Cytec Industries (CYT) & KMG Chemicals (KMG)

Cytec Industries (NYSE: CYT) and KMG Chemicals (NYSE:KMG) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Institutional and Insider Ownership

73.7% of KMG Chemicals shares are held by institutional investors. 6.9% of KMG Chemicals shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Cytec Industries and KMG Chemicals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cytec Industries 11.96% 18.60% 8.55%
KMG Chemicals 7.05% 15.66% 9.75%

Dividends

KMG Chemicals pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Cytec Industries does not pay a dividend. KMG Chemicals pays out 6.7% of its earnings in the form of a dividend. KMG Chemicals has increased its dividend for 3 consecutive years.

Valuation & Earnings

This table compares Cytec Industries and KMG Chemicals’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cytec Industries N/A N/A N/A N/A N/A
KMG Chemicals $312.48 million 1.86 $51.47 million $1.80 27.15

KMG Chemicals has higher revenue and earnings than Cytec Industries.

Analyst Ratings

This is a summary of current recommendations for Cytec Industries and KMG Chemicals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cytec Industries 0 0 0 0 N/A
KMG Chemicals 0 0 1 0 3.00

KMG Chemicals has a consensus target price of $37.00, suggesting a potential downside of 24.29%. Given KMG Chemicals’ higher possible upside, analysts clearly believe KMG Chemicals is more favorable than Cytec Industries.

Summary

KMG Chemicals beats Cytec Industries on 8 of the 12 factors compared between the two stocks.

Cytec Industries Company Profile

Cytec Industries Inc. is a global specialty materials and chemicals company focused on developing, manufacturing and selling value-added products. The Company offers aerospace and industrial materials, mining and plastics industries. The Company operates through four segments: Aerospace Materials, Industrial Materials, In Process Separation, and Additive Technologies. The Aerospace Materials segment includes advanced composites, carbon fiber, and structural film adhesives. The Industrial Materials segment includes structural composite materials, which serve automotive, motorsports, recreation, tooling, and other structural materials markets and process materials, which serves aerospace, wind energy, and other process materials markets. The In Process Separation segment includes mining chemicals and phosphines. The Additive Technologies segment includes polymer additives, specialty additives, and formulated resins. The Company operates as a wholly owned subsidiary of Solvay.

KMG Chemicals Company Profile

KMG Chemicals, Inc. manufactures, formulates and globally distributes specialty chemicals. The Company operates businesses selling electronic chemicals, industrial wood treating chemicals, and industrial valve lubricants and sealants. The Company operates through two segments: Electronic chemicals and Other chemicals. The Company operates through its subsidiaries, KMG Electronic Chemicals, Inc. (KMG EC), KMG-Bernuth, Inc. (KMG Bernuth) and KMG Val-Tex, LLC (Val-Tex). The Company’s Electronic chemicals business sells high purity and ultra-purity wet process chemicals primarily to the semiconductor industry. The Company’s Other chemicals segment includes its industrial lubricants business and wood treating chemicals business. The Company’s products sulfuric, phosphoric, nitric and hydrofluoric acids, ammonium hydroxide, hydrogen peroxide, isopropyl alcohol, other specialty organic solvents and various blends of chemicals.

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