Reviewing UFP Technologies (UFPT) & Praxair (PX)

UFP Technologies (NASDAQ: UFPT) and Praxair (NYSE:PX) are both industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Institutional and Insider Ownership

68.2% of UFP Technologies shares are owned by institutional investors. Comparatively, 85.3% of Praxair shares are owned by institutional investors. 13.3% of UFP Technologies shares are owned by insiders. Comparatively, 0.2% of Praxair shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Praxair pays an annual dividend of $3.15 per share and has a dividend yield of 2.1%. UFP Technologies does not pay a dividend. Praxair pays out 56.0% of its earnings in the form of a dividend. UFP Technologies has increased its dividend for 12 consecutive years.

Profitability

This table compares UFP Technologies and Praxair’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UFP Technologies 5.43% 6.90% 6.09%
Praxair 14.56% 27.13% 8.34%

Earnings and Valuation

This table compares UFP Technologies and Praxair’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
UFP Technologies $146.13 million 1.31 $7.97 million $1.09 24.08
Praxair $10.53 billion 4.03 $1.50 billion $5.62 26.38

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

Risk & Volatility

UFP Technologies has a beta of 0.18, suggesting that its share price is 82% less 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.

Analyst Ratings

This is a breakdown of current ratings and price targets for UFP Technologies and Praxair, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UFP Technologies 0 0 0 0 N/A
Praxair 2 7 6 0 2.27

Praxair has a consensus target price of $146.09, indicating a potential downside of 1.48%. Given Praxair’s higher probable upside, analysts clearly believe Praxair is more favorable than UFP Technologies.

Summary

Praxair beats UFP Technologies on 13 of the 16 factors compared between the two stocks.

About UFP Technologies

UFP Technologies, Inc. is a designer and custom converter of foams, plastics, composites and natural fiber materials. The Company is engaged in providing solutions to customers primarily within the medical, automotive, consumer, electronics, industrial, and aerospace and defense markets. It converts these materials using laminating, molding, and fabricating manufacturing technologies. The Company’s raw materials consist of polyethylene and polyurethane foams, sheet plastics, pulp fiber, cross-linked polyethylene and reticulated polyurethane foams, fabric and foam laminates, and natural fiber materials. The Company converts these materials to provide customers various solutions, including automotive interior trim, medical device components, disposable wound care components, military uniform and gear components, athletic padding, air filtration, high-temperature insulation, abrasive nail files and other beauty aids, and cushion packaging for their products.

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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