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

Insider & Institutional Ownership

92.3% of Valvoline shares are held by institutional investors. Comparatively, 15.0% of OCI Partners shares are held by institutional investors. 0.1% of Valvoline shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations and price targets for Valvoline and OCI Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valvoline 0 6 5 0 2.45
OCI Partners 1 0 0 0 1.00

Valvoline currently has a consensus price target of $25.73, indicating a potential upside of 16.68%. OCI Partners has a consensus price target of $7.00, indicating a potential downside of 15.15%. Given Valvoline’s stronger consensus rating and higher probable upside, analysts plainly believe Valvoline is more favorable than OCI Partners.

Valuation & Earnings

This table compares Valvoline and OCI Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Valvoline $2.03 billion 2.20 $520.00 million $1.29 17.09
OCI Partners $298.87 million 2.40 $93.85 million ($0.19) -43.42

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

Profitability

This table compares Valvoline and OCI Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valvoline 13.00% -106.06% 14.55%
OCI Partners -5.60% -10.52% -2.53%

Dividends

Valvoline pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. OCI Partners pays an annual dividend of $0.48 per share and has a dividend yield of 5.8%. Valvoline pays out 15.5% of its earnings in the form of a dividend. OCI Partners pays out -252.6% 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. OCI Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Valvoline beats OCI Partners on 10 of the 14 factors compared between the two stocks.

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.

OCI Partners Company Profile

OCI Partners LP owns and operates an integrated methanol and ammonia production facility that is located on the Texas Gulf Coast near Beaumont. The Company has an annual methanol production capacity of approximately 912,500 metric tons and an annual ammonia production capacity of approximately 331,000 metric tons. It purchases natural gas from third parties and processes the natural gas into synthesis gas, which it then further processes in the production of methanol and ammonia. It stores and sells the processed methanol and ammonia to industrial and commercial customers for further processing or distribution. Its methanol production unit comprises Foster-Wheeler-designed twin steam methane reformers for synthesis gas production, over two Lurgi-designed parallel low-pressure, water-cooled reactors and approximately four distillation columns. The Haldor-Topsoe-designed ammonia synthesis loop at its facility processes hydrogen produced by methanol production process.

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