Critical Survey: RPM International (RPM) versus Akzo Nobel (AKZOD)

RPM International (NYSE:RPM) and Akzo Nobel (OTCMKTS:AKZOD) are both construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Profitability

This table compares RPM International and Akzo Nobel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RPM International 4.47% 21.39% 6.58%
Akzo Nobel 9.76% 9.43% 3.69%

Earnings & Valuation

This table compares RPM International and Akzo Nobel’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RPM International $5.32 billion 1.43 $337.77 million $2.92 19.73
Akzo Nobel $10.86 billion 1.82 $940.40 million $1.86 15.59

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

Risk and Volatility

RPM International has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Akzo Nobel has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for RPM International and Akzo Nobel, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RPM International 2 4 4 0 2.20
Akzo Nobel 0 0 0 0 N/A

RPM International presently has a consensus target price of $65.00, indicating a potential upside of 12.81%. Given RPM International’s higher possible upside, equities analysts clearly believe RPM International is more favorable than Akzo Nobel.

Dividends

RPM International pays an annual dividend of $1.40 per share and has a dividend yield of 2.4%. Akzo Nobel pays an annual dividend of $0.25 per share and has a dividend yield of 0.9%. RPM International pays out 47.9% of its earnings in the form of a dividend. Akzo Nobel pays out 13.4% 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. RPM International has increased its dividend for 44 consecutive years. RPM International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

77.6% of RPM International shares are owned by institutional investors. Comparatively, 0.2% of Akzo Nobel shares are owned by institutional investors. 1.8% of RPM International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

RPM International beats Akzo Nobel on 11 of the 16 factors compared between the two stocks.

About RPM International

RPM International Inc. manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. Its Industrial segment offers waterproofing, coatings, and institutional roofing systems; sealants, air barriers, tapes, and foams; residential home weatherization systems; roofing and building maintenance and related services; sealing and bonding, and flooring and in-plant glazing solutions; solutions for fire stopping and intumescent steel coating, and the manufacturing industry; polymer flooring systems; and fiberglass reinforced plastic gratings and shapes. It also offers corrosion-control coating, containment lining, fire and sound proofing, and insulation products; rolled asphalt roofing materials and chemical admixtures; concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps, and restoration materials; specialty construction products; and amine curing agents, reactive diluents, specialty epoxy resins and other intermediates. The company's Specialty segment provides fluorescent colorants and pigments; shellac-based-specialty and marine coatings; insulated building cladding materials; fire and water damage restoration, and carpet cleaning and disinfecting products; fuel additives; and wood treatments, furniture finishes, and touch-up products. Its Consumer segment offers specialty products for paint contractors and the DIYers, deck and fence restoration products, metallic and faux finish coatings, exterior wood deck and concrete restoration systems, flooring finishes, and hobby paints and cements; caulk, sealant, adhesive, insulating foam, spackling, glazing, and patch and repair products; and nail enamels, polishes, and coating components. The company was founded in 1947 and is headquartered in Medina, Ohio.

About Akzo Nobel

Akzo Nobel N.V. operates as a paints and coatings company in the Netherlands and internationally. The company operates through Decorative Paints and Performance Coatings segments. It provides decorative paints, including paints, lacquers, and varnishes; mixing machines, color concepts, and training courses for the building and renovation industry; and specialty coatings for metal, wood, and other building materials. The company offers its decorative paints under the Alba, Astral, Bruguer, Coral, Dulux, Flexa, Inca, Levis, Marshall, Nordsjo, Sadolin, Sikkens, and Vivechrome brands. It also offers performance coatings to protect and enhance ships, cars, aircraft, yachts, architectural components, consumer goods, and oil and gas facilities. The company was formerly known as Akzo NV and changed its name to Akzo Nobel N.V. in 1994. Akzo Nobel N.V. was founded in 1646 and is headquartered in Amsterdam, the Netherlands.

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