BioAmber (NYSE: BIOA) and Kraton Corporation (NYSE:KRA) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitabiliy, valuation and analyst recommendations.

Profitability

This table compares BioAmber and Kraton Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BioAmber -127.85% -59.01% -21.42%
Kraton Corporation 1.44% 8.50% 1.48%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for BioAmber and Kraton Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BioAmber 0 1 1 0 2.50
Kraton Corporation 0 0 0 0 N/A

BioAmber currently has a consensus price target of $4.00, indicating a potential upside of 51.52%. Given BioAmber’s higher probable upside, equities research analysts clearly believe BioAmber is more favorable than Kraton Corporation.

Valuation and Earnings

This table compares BioAmber and Kraton Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BioAmber $8.94 million 10.95 -$24.41 million ($0.43) -6.14
Kraton Corporation $1.78 billion 0.59 $321.00 million $0.81 41.84

Kraton Corporation has higher revenue and earnings than BioAmber. BioAmber is trading at a lower price-to-earnings ratio than Kraton Corporation, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

41.2% of BioAmber shares are owned by institutional investors. Comparatively, 97.5% of Kraton Corporation shares are owned by institutional investors. 8.3% of BioAmber shares are owned by insiders. Comparatively, 5.0% of Kraton Corporation shares are owned 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.

Volatility and Risk

BioAmber has a beta of 2.61, indicating that its stock price is 161% more volatile than the S&P 500. Comparatively, Kraton Corporation has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Summary

Kraton Corporation beats BioAmber on 7 of the 12 factors compared between the two stocks.

BioAmber Company Profile

BioAmber Inc. (BioAmber), formerly DNP Green Technology, Inc., is an industrial biotechnology company, which produces sustainable chemicals. The Company’s technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstocks into sustainable chemicals that are replacements for petroleum-derived chemicals, which are used in a range of everyday products, including plastics, food additives and personal care products. Its geographical segments include Europe and North America. Its product pipeline includes the derivatives of bio-succinic acid, such as 1,4 Butanediol (1,4 BDO) and tetrahydrofuran (THF), and succinic acid-based polyesters, and C6 building block chemicals, such as adipic acid, caprolactam and hexamethylenediamine (HMDA). Its products are used in various applications, including polyurethanes, resins and coatings, de-icing and coolant solutions, fine chemicals, lubricants, carpets, engineering plastics and artificial leather products.

Kraton Corporation Company Profile

Kraton Corporation, formerly Kraton Performance Polymers, Inc., is a specialty chemicals company. The Company manufactures styrenic block copolymers (SBCs) and other engineered polymers. The Company also produces specialty products primarily derived from pine wood pulping co-products. The Company operates through two segments: Polymer Segment, which comprises SBCs and other engineered polymers business, and Chemical Segment, which comprises pine-based specialty products business. Its SBCs are used in a range of applications, including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing and footwear products. The Company also sells isoprene rubber (IR) and isoprene rubber latex (IRL), which are non-SBC products primarily used in applications, such as medical products, personal care, adhesives, tackifiers, paints and coatings. It offers crude tall oil (CTO) and crude sulfate turpentine (CST).

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