A. Schulman (NASDAQ: SHLM) and UFP Technologies (NASDAQ:UFPT) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.

Valuation and Earnings

This table compares A. Schulman and UFP Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
A. Schulman $2.42 billion 0.37 $207.01 million ($12.50) -2.44
UFP Technologies $148.67 million 1.27 $17.67 million $1.23 21.18

A. Schulman has higher revenue and earnings than UFP Technologies. A. Schulman is trading at a lower price-to-earnings ratio than UFP Technologies, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

84.2% of A. Schulman shares are owned by institutional investors. Comparatively, 68.2% of UFP Technologies shares are owned by institutional investors. 4.1% of A. Schulman shares are owned by company insiders. Comparatively, 13.3% of UFP Technologies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares A. Schulman and UFP Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
A. Schulman -14.86% 35.64% 3.29%
UFP Technologies 6.03% 6.86% 6.04%

Risk & Volatility

A. Schulman has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500. Comparatively, UFP Technologies has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for A. Schulman and UFP Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
A. Schulman 0 2 2 0 2.50
UFP Technologies 0 0 0 0 N/A

A. Schulman presently has a consensus target price of $35.00, suggesting a potential upside of 14.75%. Given A. Schulman’s higher possible upside, analysts plainly believe A. Schulman is more favorable than UFP Technologies.

Dividends

A. Schulman pays an annual dividend of $0.82 per share and has a dividend yield of 2.7%. UFP Technologies does not pay a dividend. A. Schulman pays out -6.6% of its earnings in the form of a dividend.

Summary

A. Schulman beats UFP Technologies on 9 of the 14 factors compared between the two stocks.

A. Schulman Company Profile

A. Schulman, Inc. is an international supplier of plastic formulations, resins and services, and provides solutions to its customers’ requirements through custom-formulated products. The Company’s customers span a range of markets, such as packaging, mobility, building and construction, electronics and electrical, agriculture, personal care and hygiene, custom services, and sports, home and leisure. The Company’s segments include Europe, Middle East and Africa (EMEA), the United States and Canada (USCAN), Latin America (LATAM), Asia Pacific (APAC) and Engineered Composites (EC). As of August 31, 2016, the Company operated in six product families, including custom performance colors (CPC), engineered composites, Masterbatch solutions, engineered plastics, specialty powders and distribution services. The CPC product family offers powdered, pelletized and liquid color concentrates that are custom-designed for thermoplastic resins.

UFP Technologies Company Profile

UFP Technologies, Inc. is a designer and custom converter of foams, plastics, composites and natural fiber materials. The Company is engaged in providing solutions to customers primarily within the medical, automotive, consumer, electronics, industrial, and aerospace and defense markets. It converts these materials using laminating, molding, and fabricating manufacturing technologies. The Company’s raw materials consist of polyethylene and polyurethane foams, sheet plastics, pulp fiber, cross-linked polyethylene and reticulated polyurethane foams, fabric and foam laminates, and natural fiber materials. The Company converts these materials to provide customers various solutions, including automotive interior trim, medical device components, disposable wound care components, military uniform and gear components, athletic padding, air filtration, high-temperature insulation, abrasive nail files and other beauty aids, and cushion packaging for their products.

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