Ingevity Corp (NASDAQ: NGVT) and Praxair (NYSE:PX) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares Ingevity Corp and Praxair’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ingevity Corp 13.75% 76.78% 16.55%
Praxair 14.10% 27.93% 8.25%

Dividends

Praxair pays an annual dividend of $3.15 per share and has a dividend yield of 2.3%. Ingevity Corp does not pay a dividend. Praxair pays out 58.9% of its earnings in the form of a dividend. Praxair has increased its dividend for 12 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations for Ingevity Corp and Praxair, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ingevity Corp 0 1 4 0 2.80
Praxair 2 7 4 0 2.15

Ingevity Corp presently has a consensus target price of $67.00, suggesting a potential upside of 12.61%. Praxair has a consensus target price of $136.89, suggesting a potential upside of 2.06%. Given Ingevity Corp’s stronger consensus rating and higher probable upside, analysts clearly believe Ingevity Corp is more favorable than Praxair.

Insider & Institutional Ownership

85.3% of Praxair shares are owned by institutional investors. 0.2% of Praxair shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Ingevity Corp and Praxair’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ingevity Corp $942.10 million 2.66 $216.90 million N/A N/A
Praxair $10.92 billion 3.51 $3.54 billion $5.35 25.07

Praxair has higher revenue and earnings than Ingevity Corp.

Summary

Praxair beats Ingevity Corp on 8 of the 14 factors compared between the two stocks.

About Ingevity Corp

Ingevity Corporation is a manufacturer of specialty chemicals and high performance carbon materials. The Company is also a manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. The Company operates through two segments: Performance Materials and Performance Chemicals. The Performance Materials segment primarily produces automotive carbon products used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. The Performance Chemicals segment develops, manufactures and sells a range of specialty chemicals primarily derived from co-products of the Kraft pulping process. Its products are used in a range of applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks and automotive components that reduce gasoline vapor emissions.

About Praxair

Praxair, Inc. is an industrial gas company. The Company’s operations are organized into five segments, four of which have been determined on a geographic basis of segmentation: North America, Europe, South America and Asia. In addition, it operates its surface technologies business through its subsidiary, Praxair Surface Technologies, Inc., which represents the fifth segment. Its operations consist of two product lines: industrial gases and surface technologies. Its industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases). It also designs, engineers and builds equipment that produces industrial gases primarily for internal use. Its Surface Technologies segment, operated through Praxair Surface Technologies, Inc., supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders.

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