American Vanguard Corporation (NYSE: AVD) and Potash Corporation of Saskatchewan (NYSE:POT) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, analyst recommendations, institutional ownership and earnings.

Insider and Institutional Ownership

76.5% of American Vanguard Corporation shares are held by institutional investors. Comparatively, 59.1% of Potash Corporation of Saskatchewan shares are held by institutional investors. 4.7% of American Vanguard Corporation shares are held by company insiders. Comparatively, 3.1% of Potash Corporation of Saskatchewan shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

American Vanguard Corporation has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, Potash Corporation of Saskatchewan has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Profitability

This table compares American Vanguard Corporation and Potash Corporation of Saskatchewan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Vanguard Corporation 4.56% 5.10% 3.34%
Potash Corporation of Saskatchewan 11.07% 5.19% 2.48%

Valuation & Earnings

This table compares American Vanguard Corporation and Potash Corporation of Saskatchewan’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Vanguard Corporation $318.49 million 1.87 $44.28 million $0.50 39.90
Potash Corporation of Saskatchewan $3.89 billion 3.78 $1.25 billion $0.59 29.69

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

Analyst Ratings

This is a summary of recent recommendations and price targets for American Vanguard Corporation and Potash Corporation of Saskatchewan, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Vanguard Corporation 0 1 1 1 3.00
Potash Corporation of Saskatchewan 1 10 7 0 2.33

American Vanguard Corporation presently has a consensus target price of $19.50, suggesting a potential downside of 2.26%. Potash Corporation of Saskatchewan has a consensus target price of $17.98, suggesting a potential upside of 2.64%. Given Potash Corporation of Saskatchewan’s higher probable upside, analysts plainly believe Potash Corporation of Saskatchewan is more favorable than American Vanguard Corporation.

Dividends

American Vanguard Corporation pays an annual dividend of $0.06 per share and has a dividend yield of 0.3%. Potash Corporation of Saskatchewan pays an annual dividend of $0.40 per share and has a dividend yield of 2.3%. American Vanguard Corporation pays out 12.0% of its earnings in the form of a dividend. Potash Corporation of Saskatchewan pays out 67.8% 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.

Summary

Potash Corporation of Saskatchewan beats American Vanguard Corporation on 9 of the 17 factors compared between the two stocks.

American Vanguard Corporation Company Profile

American Vanguard Corporation operates as a holding company. The Company conducts its business through its subsidiaries, AMVAC Chemical Corporation (AMVAC), GemChem, Inc. (GemChem), 2110 Davie Corporation (DAVIE), Quimica Amvac de Mexico S.A. de C.V. (AMVAC M), AMVAC Mexico Sociedad de Responsabilidad Limitada (AMVAC M Srl), AMVAC de Costa Rica Sociedad de Responsabilidad Limitada (AMVAC CR Srl), AMVAC Switzerland GmbH (AMVAC S), AMVAC do Brasil Representacoes Ltda (AMVAC B), AMVAC C.V. (AMVAC CV), AMVAC Netherlands BV (AMVAC BV), Envance Technologies, LLC (Envance), AMVAC Singapore Pte, Ltd (AMVAC Sgpr) and Huifeng AMVAC Innovation Co. Limited (Hong Kong JV). AMVAC is a specialty chemical manufacturer that develops and markets products for agricultural, commercial and consumer uses. It manufactures and formulates chemicals, such as insecticides, fungicides, herbicides, molluscicides and soil fumigants for crops, turf and ornamental plants, and human and animal health protection.

Potash Corporation of Saskatchewan Company Profile

Potash Corporation of Saskatchewan Inc. (PCS) is a fertilizer producer producing a range of primary crop nutrients, such as potash, nitrogen and phosphate. The Company operates through three segments: potash, nitrogen and phosphate. As of December 31, 2016, it owned and operated five potash operations in Saskatchewan and owned one in New Brunswick. Its nitrogen operations involve the production of nitrogen fertilizers and nitrogen feed and industrial products, including ammonia, urea, nitrogen solutions, ammonium nitrate and nitric acid. It has nitrogen facilities in Georgia, Louisiana, Ohio and Trinidad. Its phosphate operations include the manufacture and sale of solid and liquid phosphate fertilizers, phosphate feed and industrial acid, which is used in food products and industrial processes. It has phosphate mines and mineral processing plant complexes in Florida and North Carolina. As of December 31, 2016, the Company had four phosphate feed plants in the United States.

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