Balchem (NASDAQ: BCPC) and KMG Chemicals (NYSE:KMG) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.
Volatility and Risk
Balchem has a beta of 0.94, suggesting that its share price is 6% less 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.
This is a summary of recent ratings and price targets for Balchem and KMG Chemicals, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Balchem presently has a consensus price target of $85.00, indicating a potential downside of 10.97%. KMG Chemicals has a consensus price target of $71.50, indicating a potential upside of 4.14%. Given KMG Chemicals’ stronger consensus rating and higher probable upside, analysts plainly believe KMG Chemicals is more favorable than Balchem.
Earnings and Valuation
This table compares Balchem and KMG Chemicals’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Balchem||$594.79 million||5.15||$90.07 million||N/A||N/A|
|KMG Chemicals||$333.44 million||3.16||$23.63 million||$2.27||30.25|
Balchem has higher revenue and earnings than KMG Chemicals.
This table compares Balchem and KMG Chemicals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Balchem pays an annual dividend of $0.42 per share and has a dividend yield of 0.4%. KMG Chemicals pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. KMG Chemicals pays out 5.3% of its earnings in the form of a dividend.
Insider & Institutional Ownership
87.4% of Balchem shares are held by institutional investors. Comparatively, 87.9% of KMG Chemicals shares are held by institutional investors. 1.0% of Balchem shares are held by insiders. Comparatively, 6.1% of KMG Chemicals shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Balchem beats KMG Chemicals on 9 of the 15 factors compared between the two stocks.
Balchem Corporation develops, manufactures, and markets specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, medical sterilization, and industrial markets in the United States and internationally. The company's Human Nutrition & Health segment supplies ingredients in the food and beverage industry. Its products include creamer and chocolate systems, dairy replacers, powdered fats, nutritional beverage bases, beverages, juice and dairy bases, ice cream bases and variegates, cereals, grain based snacks, and cereal based ingredients. This segment also offers microencapsulation solutions; and human grade choline nutrients and mineral amino acid chelated products for wellness applications. Its Animal Nutrition & Health segment provides microencapsulated products to enhance health and milk production in ruminant animals; chelation technology, which offers enhanced nutrient absorption for various species of production and companion animals; and choline chloride, a nutrient for monogastric animal health. The company's Specialty Products segment offers ethylene oxide primarily for use in the health care industry; and single use canisters with ethylene oxide for sterilizing re-usable devices. It also sells propylene oxide, a fumigant to aid in the control of insects and microbiological spoilage, as well as to reduce bacterial and mold contamination in shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs, and prunes; and chelated minerals for high value crops. The company's Industrial Products segment provides choline chloride derivatives for hydraulic fracturing of shale natural gas wells; and methylamines, which are building blocks for the manufacture of choline products, as well as used in industrial applications. The company sells its products through sales force, independent distributors, and sales agents. Balchem Corporation was founded in 1967 and is headquartered in New Hampton, New York.
About KMG Chemicals
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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