W. R. Grace & Co (NYSE: GRA) and DSM (OTCMKTS:RDSMY) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.
Volatility and Risk
W. R. Grace & Co has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, DSM has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.
W. R. Grace & Co pays an annual dividend of $0.96 per share and has a dividend yield of 1.3%. DSM pays an annual dividend of $0.59 per share and has a dividend yield of 2.2%. W. R. Grace & Co pays out 28.2% of its earnings in the form of a dividend. DSM pays out 53.2% 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.
Valuation and Earnings
This table compares W. R. Grace & Co and DSM’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|W. R. Grace & Co||$1.72 billion||2.86||$11.20 million||$3.40||21.44|
|DSM||$9.75 billion||1.97||$2.00 billion||$1.11||23.79|
DSM has higher revenue and earnings than W. R. Grace & Co. W. R. Grace & Co is trading at a lower price-to-earnings ratio than DSM, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
82.2% of W. R. Grace & Co shares are held by institutional investors. Comparatively, 0.1% of DSM shares are held by institutional investors. 1.7% of W. R. Grace & Co shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares W. R. Grace & Co and DSM’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|W. R. Grace & Co||0.68%||73.16%||8.11%|
This is a summary of current recommendations and price targets for W. R. Grace & Co and DSM, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|W. R. Grace & Co||0||0||9||0||3.00|
W. R. Grace & Co currently has a consensus target price of $81.56, indicating a potential upside of 11.87%. Given W. R. Grace & Co’s higher possible upside, equities research analysts plainly believe W. R. Grace & Co is more favorable than DSM.
W. R. Grace & Co beats DSM on 9 of the 15 factors compared between the two stocks.
W. R. Grace & Co Company Profile
W. R. Grace & Co. produces and sells specialty chemicals and materials worldwide. It operates through two segments, Grace Catalysts Technologies and Grace Materials Technologies. The Grace Catalysts Technologies segment offers fluid catalytic cracking (FCC) catalysts for the production of transportation fuels, such as gasoline and diesel fuels, and other petroleum-based products; FCC additives; and methanol-to-olefins catalysts for the conversion of methanol into petrochemical feeds, including ethylene and propylene. This segment also provides hydro processing catalysts used in process reactors to upgrade heavy oils into lighter products; polyolefin catalysts and catalyst supports for the production of polypropylene and polyethylene thermoplastic resins; and chemical catalysts used in various industrial, environmental, and consumer applications, as well as gas-phase polypropylene process technology to manufacture polypropylene products. The Grace Materials Technologies segment offers silica-based and silica-alumina-based materials for use in coatings, consumer, industrial, and pharmaceutical applications. W. R. Grace & Co. was founded in 1854 and is headquartered in Columbia, Maryland.
DSM Company Profile
Koninklijke DSM N.V., a science-based company, engages in health, nutrition, and materials businesses worldwide. The company operates through three segments: Nutrition, Materials, and Innovation Center. The Nutrition segment offers nutrients, such as vitamins, carotenoids, nutritional lipids, and other ingredients to feed, food, pharmaceutical, and personal care industries; and food enzymes, cultures, yeast extracts, savory flavors, hydrocolloids, and other specialty ingredients for use in dairy, baking, beverage, and savory applications. The Materials segment provides Dyneema, a fiber solution serving textiles, commercial marine, and sports segments; high-performance plastics primarily for use in automotive and electronics markets, as well as offers solutions to specialized industries, including water management, breathable textiles, and flexible food packaging; and resins solutions for paints and coatings, fiber optic coatings, and 3D printing applications. The Innovation Center segment offers cellulosic bio-ethanol and bio-based succinic acids; anti-reflective coatings for solar glass; and anti-soiling coatings for use in cleaning and maintaining solar farms in desert-like conditions. This segment also produces biomedical materials and technologies that enable medical device manufacturers to enhance care across various medical specialties. Koninklijke DSM N.V. was founded in 1902 and is headquartered in Heerlen, the Netherlands.
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