Critical Survey: Rayonier Advanced Materials (RYAM) versus KMG Chemicals (KMG)
Rayonier Advanced Materials (NYSE: RYAM) and KMG Chemicals (NYSE:KMG) are both small-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.
Institutional & Insider Ownership
93.5% of Rayonier Advanced Materials shares are held by institutional investors. Comparatively, 73.7% of KMG Chemicals shares are held by institutional investors. 2.1% of Rayonier Advanced Materials shares are held by insiders. Comparatively, 6.9% of KMG Chemicals shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Rayonier Advanced Materials pays an annual dividend of $0.28 per share and has a dividend yield of 2.0%. KMG Chemicals pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Rayonier Advanced Materials pays out 35.0% of its earnings in the form of a dividend. KMG Chemicals pays out 6.3% 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.
This table compares Rayonier Advanced Materials and KMG Chemicals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Rayonier Advanced Materials||5.71%||24.17%||3.63%|
Volatility & Risk
Rayonier Advanced Materials has a beta of 4.27, suggesting that its stock price is 327% more volatile than the S&P 500. Comparatively, KMG Chemicals has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.
This is a breakdown of current ratings and target prices for Rayonier Advanced Materials and KMG Chemicals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Rayonier Advanced Materials||0||0||5||0||3.00|
Rayonier Advanced Materials presently has a consensus price target of $18.80, suggesting a potential upside of 35.74%. KMG Chemicals has a consensus price target of $37.00, suggesting a potential downside of 32.98%. Given Rayonier Advanced Materials’ higher possible upside, equities analysts plainly believe Rayonier Advanced Materials is more favorable than KMG Chemicals.
Earnings and Valuation
This table compares Rayonier Advanced Materials and KMG Chemicals’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Rayonier Advanced Materials||$840.05 million||0.71||$202.73 million||$0.80||17.31|
|KMG Chemicals||$312.48 million||2.10||$51.47 million||$1.92||28.76|
Rayonier Advanced Materials has higher revenue and earnings than KMG Chemicals. Rayonier Advanced Materials is trading at a lower price-to-earnings ratio than KMG Chemicals, indicating that it is currently the more affordable of the two stocks.
Rayonier Advanced Materials beats KMG Chemicals on 8 of the 15 factors compared between the two stocks.
About Rayonier Advanced Materials
Rayonier Advanced Materials Inc. is engaged in the production of cellulose specialties. The Company’s product lines include cellulose specialties and commodity products. Its products are used in manufacturing processes. The Company’s products are sold throughout the world to companies for use in various industrial applications, and to produce a range of products, including cigarette filters, foods, pharmaceuticals, textiles and electronics. The Company focuses on producing various forms of cellulose specialties products, such as cellulose acetate and cellulose ethers. The Company’s production facilities are located in Jesup, Georgia and Fernandina Beach, Florida. The Jesup plant can produce cellulose specialties or commodity products using both hardwood and softwood in a pre-hydrolyzed kraft or high potential of hydrogen (pH) cooking process. The Fernandina Beach plant can produce cellulose specialties or commodity products using softwood in a sulfite or low pH cooking process.
About KMG Chemicals
KMG Chemicals, Inc. manufactures, formulates and globally distributes specialty chemicals. The Company operates businesses selling electronic chemicals, industrial wood treating chemicals, and industrial valve lubricants and sealants. The Company operates through two segments: Electronic chemicals and Other chemicals. The Company operates through its subsidiaries, KMG Electronic Chemicals, Inc. (KMG EC), KMG-Bernuth, Inc. (KMG Bernuth) and KMG Val-Tex, LLC (Val-Tex). The Company’s Electronic chemicals business sells high purity and ultra-purity wet process chemicals primarily to the semiconductor industry. The Company’s Other chemicals segment includes its industrial lubricants business and wood treating chemicals business. The Company’s products sulfuric, phosphoric, nitric and hydrofluoric acids, ammonium hydroxide, hydrogen peroxide, isopropyl alcohol, other specialty organic solvents and various blends of chemicals.
Receive News & Ratings for Rayonier Advanced Materials Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Rayonier Advanced Materials Inc. and related companies with MarketBeat.com's FREE daily email newsletter.