Valvoline (NYSE: VVV) and Orion Engineered Carbons S.A (NYSE:OEC) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, dividends, analyst recommendations, valuation, profitability and earnings.

Dividends

Valvoline pays an annual dividend of $0.20 per share and has a dividend yield of 0.9%. Orion Engineered Carbons S.A pays an annual dividend of $0.75 per share and has a dividend yield of 3.5%. Valvoline pays out 15.5% of its earnings in the form of a dividend. Orion Engineered Carbons S.A pays out 88.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation & Earnings

This table compares Valvoline and Orion Engineered Carbons S.A’s 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
Orion Engineered Carbons S.A $1.36 billion 0.93 $268.66 million $0.85 25.06

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

Institutional & Insider Ownership

92.3% of Valvoline shares are owned by institutional investors. Comparatively, 37.2% of Orion Engineered Carbons S.A shares are owned by institutional investors. 0.1% of Valvoline 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.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Valvoline and Orion Engineered Carbons S.A, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valvoline 0 6 5 0 2.45
Orion Engineered Carbons S.A 0 1 2 0 2.67

Valvoline currently has a consensus price target of $25.73, indicating a potential upside of 16.68%. Orion Engineered Carbons S.A has a consensus price target of $23.33, indicating a potential upside of 9.55%. Given Valvoline’s higher probable upside, analysts clearly believe Valvoline is more favorable than Orion Engineered Carbons S.A.

Profitability

This table compares Valvoline and Orion Engineered Carbons S.A’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valvoline 13.00% -106.06% 14.55%
Orion Engineered Carbons S.A 4.12% 148.13% 8.81%

Summary

Valvoline beats Orion Engineered Carbons S.A on 11 of the 15 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.

Orion Engineered Carbons S.A Company Profile

Orion Engineered Carbons S.A. is a producer of carbon black. The Company operates through two segments: Specialty Carbon Black and Rubber Carbon Black. The Specialty Carbon Black segment is engaged in the production of specialty carbon black. The Rubber Carbon Black segment is involved in the production of rubber carbon black. As of December 31, 2016, it operated a diversified carbon black business with over 280 specialty carbon black grades and approximately 80 rubber carbon black grades. Carbon black is used as a pigment and as a performance additive in coatings, polymers, printing and special applications (specialty carbon black), and in the reinforcement of rubber in tires and mechanical rubber goods (rubber carbon black). As of December 31, 2016, it operated a global platform of 13 production facilities in Europe, North and South America, Asia and South Africa and three sales companies, as well as one jointly-owned production plant in Germany.

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