KMG Chemicals (NYSE: KMG) and Valvoline (NYSE:VVV) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, valuation, analyst recommendations, profitabiliy and earnings.

Valuation & Earnings

This table compares KMG Chemicals and Valvoline’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
KMG Chemicals $312.48 million 1.97 $51.47 million $1.80 28.70
Valvoline $2.00 billion 2.37 $511.00 million N/A N/A

Valvoline has higher revenue and earnings than KMG Chemicals.

Analyst Recommendations

This is a summary of recent recommendations and price targets for KMG Chemicals and Valvoline, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KMG Chemicals 0 0 1 0 3.00
Valvoline 0 6 5 0 2.45

KMG Chemicals currently has a consensus target price of $37.00, suggesting a potential downside of 28.38%. Valvoline has a consensus target price of $26.10, suggesting a potential upside of 12.74%. Given Valvoline’s higher possible upside, analysts plainly believe Valvoline is more favorable than KMG Chemicals.

Dividends

KMG Chemicals pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Valvoline pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. KMG Chemicals pays out 6.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

70.0% of KMG Chemicals shares are owned by institutional investors. Comparatively, 27.2% of Valvoline shares are owned by institutional investors. 6.9% of KMG Chemicals shares are owned by insiders. Comparatively, 0.1% of Valvoline shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares KMG Chemicals and Valvoline’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KMG Chemicals 7.05% 15.66% 9.75%
Valvoline N/A -876.38% 12.27%

Summary

Valvoline beats KMG Chemicals on 8 of the 13 factors compared between the two stocks.

KMG Chemicals Company Profile

KMG Chemicals, Inc. manufactures, formulates and globally distributes specialty chemicals. The Company operates businesses selling electronic chemicals, industrial wood treating chemicals, and industrial valve lubricants and sealants. The Company operates through two segments: Electronic chemicals and Other chemicals. The Company operates through its subsidiaries, KMG Electronic Chemicals, Inc. (KMG EC), KMG-Bernuth, Inc. (KMG Bernuth) and KMG Val-Tex, LLC (Val-Tex). The Company’s Electronic chemicals business sells high purity and ultra-purity wet process chemicals primarily to the semiconductor industry. The Company’s Other chemicals segment includes its industrial lubricants business and wood treating chemicals business. The Company’s products sulfuric, phosphoric, nitric and hydrofluoric acids, ammonium hydroxide, hydrogen peroxide, isopropyl alcohol, other specialty organic solvents and various blends of chemicals.

Valvoline Company Profile

Valvoline Inc. (Valvoline) is engaged in the production and distribution of automotive, commercial and industrial lubricants, and automotive chemicals. The Company operates through three segments: Core North America, Quick Lubes and International. The Core North America segment sells Valvoline, and other branded and private label products in the United States and Canada to both consumers performing their own automotive maintenance, referred to as Do-It-Yourself (DIY) consumers, as well as, to installer customers using Valvoline products to service vehicles owned by Do-It-For-Me (DIFM) consumers. Its Quick Lubes segment services the passenger car and light truck quick lube market through platforms, including its franchised Valvoline Instant Oil Change (VIOC) stores and Express Care. Its International segment sells Valvoline and other branded products through its affiliates, joint ventures, licensees and independent distributors. Its products include All Climate, DuraBlend and MaxLife.

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