Air Products & Chemicals (NYSE: APD) and Koppers Holdings (NYSE:KOP) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.

Volatility & Risk

Air Products & Chemicals has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, Koppers Holdings has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Dividends

Air Products & Chemicals pays an annual dividend of $3.80 per share and has a dividend yield of 2.6%. Koppers Holdings does not pay a dividend. Air Products & Chemicals pays out 28.5% of its earnings in the form of a dividend. Air Products & Chemicals has increased its dividend for 34 consecutive years and Koppers Holdings has increased its dividend for 5 consecutive years.

Earnings and Valuation

This table compares Air Products & Chemicals and Koppers Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Air Products & Chemicals $9.95 billion 3.17 $3.18 billion $13.33 10.84
Koppers Holdings $1.41 billion 0.57 $169.90 million $1.98 19.47

Air Products & Chemicals has higher revenue and earnings than Koppers Holdings. Air Products & Chemicals is trading at a lower price-to-earnings ratio than Koppers Holdings, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

88.1% of Air Products & Chemicals shares are held by institutional investors. Comparatively, 87.9% of Koppers Holdings shares are held by institutional investors. 0.4% of Air Products & Chemicals shares are held by company insiders. Comparatively, 3.9% of Koppers Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Air Products & Chemicals and Koppers Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Air Products & Chemicals 5.01% 4.46% 2.39%
Koppers Holdings 3.02% 153.51% 6.24%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Air Products & Chemicals and Koppers Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Air Products & Chemicals 1 6 5 0 2.33
Koppers Holdings 0 1 3 0 2.75

Air Products & Chemicals presently has a consensus price target of $153.33, suggesting a potential upside of 6.11%. Koppers Holdings has a consensus price target of $45.75, suggesting a potential upside of 18.68%. Given Koppers Holdings’ stronger consensus rating and higher possible upside, analysts plainly believe Koppers Holdings is more favorable than Air Products & Chemicals.

Summary

Air Products & Chemicals beats Koppers Holdings on 11 of the 17 factors compared between the two stocks.

About Air Products & Chemicals

Air Products and Chemicals, Inc., is an industrial gases company. The Company’s Industrial Gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, and food and beverage. The Company is also a supplier of liquefied natural gas process technology and equipment. The Company operates through five segments: Industrial Gases-Americas, Industrial Gases-Europe, Middle East, and Africa (EMEA), Industrial Gases-Asia, Industrial Gases-Global, and Corporate and other.

About Koppers Holdings

Koppers Holdings Inc. is a global integrated provider of treated wood products, wood treatment chemicals and carbon compounds. The Company operates through three segments: Railroad and Utility Products and Services (RUPS), Carbon Materials and Chemicals (CMC) and Performance Chemicals (PC). The RUPS business sells treated and untreated wood products, rail joint bars and services primarily to the railroad markets. The primary products supplied by PC business are copper-based wood preservatives, including micronized copper quaternary and micronized copper azole (MicroPro), micronized pigments (MicroShades) and chromated copper arsenate. Through CMC business, the Company processes coal tar into a range of products, including carbon pitch, creosote and carbon black feedstock. Its products and services are used in a range of markets, including the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber and construction industries.

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