Comparing Versum Materials (VSM) and WD-40 (WDFC)

Versum Materials (NYSE: VSM) and WD-40 (NASDAQ:WDFC) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Versum Materials and WD-40, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Versum Materials 0 1 6 0 2.86
WD-40 0 3 0 0 2.00

Versum Materials presently has a consensus price target of $38.71, suggesting a potential upside of 2.39%. WD-40 has a consensus price target of $125.67, suggesting a potential downside of 7.50%. Given Versum Materials’ stronger consensus rating and higher possible upside, research analysts plainly believe Versum Materials is more favorable than WD-40.

Valuation & Earnings

This table compares Versum Materials and WD-40’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Versum Materials $1.13 billion 3.65 $193.00 million $1.91 19.80
WD-40 $380.51 million 4.97 $52.93 million $3.72 36.52

Versum Materials has higher revenue and earnings than WD-40. Versum Materials is trading at a lower price-to-earnings ratio than WD-40, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Versum Materials and WD-40’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Versum Materials 13.55% 6,666.66% 17.66%
WD-40 14.29% 39.25% 14.99%

Volatility & Risk

Versum Materials has a beta of 0.24, indicating that its stock price is 76% less volatile than the S&P 500. Comparatively, WD-40 has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500.

Dividends

Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. WD-40 pays an annual dividend of $2.16 per share and has a dividend yield of 1.6%. Versum Materials pays out 10.5% of its earnings in the form of a dividend. WD-40 pays out 58.1% 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.

Insider & Institutional Ownership

92.2% of Versum Materials shares are held by institutional investors. Comparatively, 86.3% of WD-40 shares are held by institutional investors. 0.6% of Versum Materials shares are held by insiders. Comparatively, 3.6% of WD-40 shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Versum Materials beats WD-40 on 9 of the 16 factors compared between the two stocks.

Versum Materials Company Profile

Versum Materials, Inc. develops, manufactures, transports, and handles specialty materials for the semiconductor and display industries in the United States, Taiwan, South Korea, China, Europe, and rest of Asia. It operates in two segments, Materials, and Delivery Systems and Services (DS&S). The Materials segment provides specialty chemicals and materials used in semiconductors, as well as specialty gases used in the semiconductor manufacturing process, including high purity process materials for deposition, metallization, and chamber cleaning and etching; chemicals mechanical planarization slurries; organosilanes; organometallics and liquid dopants for thin film deposition; and formulated chemical products for post-etch cleaning primarily for the manufacture of silicon and compound semiconductors, and thin film transistor liquid crystal displays. The DS&S segment develops, designs, manufactures, and sells bulk gas, specialty gas, and specialty chemical cabinets and systems, which are used to manage the delivery of key materials into the semiconductor manufacturing process; and flow and temperature control systems and analytical systems to capture data. It also engages in the project management for installation and startup of the gas and chemical delivery systems, and inventory management; and provision of spare parts, equipment upgrades, equipment maintenance, and training services. In addition, this segment offers on-site services to assist customers in managing the inventory of gases and chemicals comprising ordering, product changes and monitoring, quality assurance, operation of delivery systems, and managing the bulk gas and specialty gas operations. The company was founded in 2015 and is headquartered in Tempe, Arizona.

WD-40 Company Profile

WD-40 Company engages in the development and sale of maintenance products, and homecare and cleaning products. It offers multi-purpose maintenance products, including aerosol sprays, non-aerosol trigger sprays, and in liquid-bulk form products under the WD-40 Multi-Use brand name for various consumer uses; specialty maintenance products, such as penetrants, degreasers, corrosion inhibitors, greases, lubricants, and rust removers under the WD-40 Specialist brand name; and bicycle maintenance products under the WD-40 Bike brand name comprising wet and dry chain lubricants, chain cleaners and degreasers, and foaming wash products that are designed for avid and recreational cyclists, bike enthusiasts, and mechanics. The company also provides multi-purpose and specialty drip oils, and spray lubricant products, as well as other specialty maintenance products under the 3-IN-ONE brand name; and professional spray maintenance products and lubricants for the bike market under the GT85 brand name. In addition, it offers automatic toilet bowl cleaners under the 2000 Flushes brand name; aerosol carpet stain removers, and a liquid trigger carpet stain and odor eliminators under the Spot Shot brand name; room and rug deodorizers under the Carpet Fresh brand name; carpet and household cleaners, and rug and room deodorizers under the 1001 brand name; heavy-duty hand cleaner products under the Lava brand name; and liquid mildew stain removers and automatic toilet bowl cleaners under the X-14 brand name. It offers products primarily through mass retail and home center stores, warehouse club stores, grocery stores, hardware stores, automotive parts outlets, sport retailers, independent bike dealers, online retailers, and industrial distributors and suppliers in North, Central, and South America, as well as in Asia, Australia, Europe, the Middle East, and Africa. The company was founded in 1953 and is headquartered in San Diego, California.

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