Minerals Technologies (NYSE: MTX) and Innospec (NASDAQ:IOSP) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.

Dividends

Minerals Technologies pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. Innospec pays an annual dividend of $0.76 per share and has a dividend yield of 1.2%. Minerals Technologies pays out 4.5% of its earnings in the form of a dividend. Innospec pays out 24.3% 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.

Insider & Institutional Ownership

94.4% of Minerals Technologies shares are owned by institutional investors. Comparatively, 90.7% of Innospec shares are owned by institutional investors. 2.2% of Minerals Technologies shares are owned by company insiders. Comparatively, 2.0% of Innospec shares are owned by company 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 Recommendations

This is a summary of current ratings for Minerals Technologies and Innospec, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Minerals Technologies 0 0 1 0 3.00
Innospec 0 0 1 0 3.00

Minerals Technologies currently has a consensus target price of $80.00, suggesting a potential upside of 9.74%. Innospec has a consensus target price of $65.00, suggesting a potential upside of 4.92%. Given Minerals Technologies’ higher possible upside, equities analysts clearly believe Minerals Technologies is more favorable than Innospec.

Profitability

This table compares Minerals Technologies and Innospec’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Minerals Technologies 9.62% 15.04% 5.56%
Innospec 7.22% 14.77% 8.39%

Volatility & Risk

Minerals Technologies has a beta of 2.23, meaning that its share price is 123% more volatile than the S&P 500. Comparatively, Innospec has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500.

Earnings and Valuation

This table compares Minerals Technologies and Innospec’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Minerals Technologies $1.62 billion 1.58 $349.20 million $4.40 16.57
Innospec $1.06 billion 1.41 $150.30 million $3.13 19.79

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

Summary

Minerals Technologies beats Innospec on 12 of the 14 factors compared between the two stocks.

About Minerals Technologies

Minerals Technologies Inc. is a resource- and technology-based company that develops, produces and markets a range of specialty mineral, mineral-based and synthetic mineral products and related systems and services around the world. It operates through four segments. The Specialty Minerals segment produces and sells the synthetic mineral product precipitated calcium carbonate (PCC), mines mineral ores, and processes and sells natural mineral products, primarily limestone and talc. The Performance Materials segment is a supplier of bentonite and bentonite-related products to industrial and consumer markets globally. The Refractories segment produces and markets monolithic and shaped refractory materials and specialty products, services and application and measurement equipment. The Energy Services segment offers a range of services to improve the production, costs, compliance and environmental impact of activities performed in the oil and gas industry.

About Innospec

Innospec Inc. is a specialty chemicals company engaged in developing, manufacturing, blending, marketing and supplying of specialty chemicals for use as fuel additives and ingredients for personal care, home care, agrochemical, mining and other applications and oilfield chemicals. The Company operates through four business segments: Fuel Specialties, Performance Chemicals, Oilfield Services and Octane Additives. Its Fuel Specialties develops, manufactures, blends, markets and supplies various specialty chemical products that are used as additives for a range of fuels. Its Performance Chemicals provides technology-based solutions. Its Oilfield Services business supplies drilling, completion and production chemicals. Its Octane Additives business manufactures a fuel additive for use in automotive gasoline and provides services in respect of environmental remediation. Its customers include oil and gas exploration and production companies, fuel users, and oil refiners among others.

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