FMC (NYSE: FMC) and KMG Chemicals (NYSE:KMG) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.
Risk & Volatility
FMC has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500. Comparatively, KMG Chemicals has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.
Valuation and Earnings
This table compares FMC and KMG Chemicals’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|FMC||$2.88 billion||4.32||$535.80 million||$2.71||34.10|
|KMG Chemicals||$333.44 million||3.15||$23.63 million||$2.27||30.12|
FMC has higher revenue and earnings than KMG Chemicals. KMG Chemicals is trading at a lower price-to-earnings ratio than FMC, indicating that it is currently the more affordable of the two stocks.
FMC pays an annual dividend of $0.66 per share and has a dividend yield of 0.7%. KMG Chemicals pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. FMC pays out 24.4% of its earnings in the form of a dividend. KMG Chemicals pays out 5.3% 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. FMC has increased its dividend for 7 consecutive years. FMC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares FMC and KMG Chemicals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
88.2% of FMC shares are held by institutional investors. Comparatively, 84.2% of KMG Chemicals shares are held by institutional investors. 1.2% of FMC shares are held by company insiders. Comparatively, 6.1% of KMG Chemicals shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a summary of recent recommendations and price targets for FMC and KMG Chemicals, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
FMC presently has a consensus target price of $100.35, suggesting a potential upside of 8.61%. KMG Chemicals has a consensus target price of $71.50, suggesting a potential upside of 4.56%. Given FMC’s stronger consensus rating and higher probable upside, equities analysts clearly believe FMC is more favorable than KMG Chemicals.
FMC beats KMG Chemicals on 15 of the 17 factors compared between the two stocks.
FMC Company Profile
FMC Corporation, a diversified chemical company, provides solutions, applications, and products for the agricultural, consumer, and industrial markets worldwide. The company operates in two segments, FMC Agricultural Solutions and FMC Lithium. The FMC Agricultural Solutions segment develops, manufactures, markets, and sells crop protection chemicals, including insecticides, herbicides, and fungicides that are used in agriculture to enhance crop yield and quality by controlling a range of insects, weeds, and diseases, as well as in non-agricultural markets for pest control. The FMC Lithium segment manufactures lithium for use in batteries, polymers, pharmaceuticals, greases and lubricants, glass and ceramics, and other industrial uses. FMC Corporation was founded in 1883 and is headquartered in Philadelphia, Pennsylvania.
KMG Chemicals Company Profile
KMG Chemicals, Inc., through its subsidiaries, manufactures, formulates, and distributes specialty chemicals and performance materials worldwide. The company's Electronic Chemicals segment is involved in the sale of high purity process chemicals primarily to etch and clean silicon wafers in the production of semiconductors, photovoltaics, and flat panel displays. This segment's products include sulfuric, phosphoric, and nitric and hydrofluoric acids; ammonium hydroxide; hydrogen peroxide; isopropyl alcohol; other specialty organic solvents; and various blends of chemicals. Its Performance Materials segment supplies drag-reducing agents, industrial valve lubricants, and cleaners and sealants, as well as related services and equipment, including routine and emergency valve maintenance services and training, to the pipeline and energy services markets. This segment also supplies penta products consisting of solid blocks and concentrated solutions to industrial customers who use these preservatives to pressure treat wood products, as well as sells hydrochloric acid, which is a byproduct of penta production for use in the steel and oil well service industries. KMG Chemicals, Inc. was founded in 1985 and is headquartered in Fort Worth, Texas.
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