Financial Analysis: Kraton Corporation (KRA) & OCI Partners (OCIP)
Kraton Corporation (NYSE: KRA) and OCI Partners (NYSE:OCIP) are both small-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.
Institutional & Insider Ownership
97.4% of Kraton Corporation shares are owned by institutional investors. Comparatively, 15.0% of OCI Partners shares are owned by institutional investors. 5.0% of Kraton Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Kraton Corporation has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, OCI Partners has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.
This table compares Kraton Corporation and OCI Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares Kraton Corporation and OCI Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Kraton Corporation||$1.85 billion||0.81||$338.62 million||$0.76||62.84|
|OCI Partners||$298.87 million||2.05||$93.85 million||($0.19)||-37.11|
Kraton Corporation has higher revenue and earnings than OCI Partners. OCI Partners is trading at a lower price-to-earnings ratio than Kraton Corporation, indicating that it is currently the more affordable of the two stocks.
OCI Partners pays an annual dividend of $0.48 per share and has a dividend yield of 6.8%. Kraton Corporation does not pay a dividend. OCI Partners pays out -252.6% of its earnings in the form of a dividend.
This is a breakdown of recent ratings for Kraton Corporation and OCI Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Kraton Corporation currently has a consensus price target of $60.00, indicating a potential upside of 25.63%. OCI Partners has a consensus price target of $7.00, indicating a potential downside of 0.71%. Given Kraton Corporation’s stronger consensus rating and higher possible upside, research analysts clearly believe Kraton Corporation is more favorable than OCI Partners.
Kraton Corporation beats OCI Partners on 11 of the 15 factors compared between the two stocks.
Kraton Corporation Company Profile
Kraton Corporation, formerly Kraton Performance Polymers, Inc., is a specialty chemicals company. The Company manufactures styrenic block copolymers (SBCs) and other engineered polymers. The Company also produces specialty products primarily derived from pine wood pulping co-products. The Company operates through two segments: Polymer Segment, which comprises SBCs and other engineered polymers business, and Chemical Segment, which comprises pine-based specialty products business. Its SBCs are used in a range of applications, including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing and footwear products. The Company also sells isoprene rubber (IR) and isoprene rubber latex (IRL), which are non-SBC products primarily used in applications, such as medical products, personal care, adhesives, tackifiers, paints and coatings. It offers crude tall oil (CTO) and crude sulfate turpentine (CST).
OCI Partners Company Profile
OCI Partners LP owns and operates an integrated methanol and ammonia production facility that is located on the Texas Gulf Coast near Beaumont. The Company has an annual methanol production capacity of approximately 912,500 metric tons and an annual ammonia production capacity of approximately 331,000 metric tons. It purchases natural gas from third parties and processes the natural gas into synthesis gas, which it then further processes in the production of methanol and ammonia. It stores and sells the processed methanol and ammonia to industrial and commercial customers for further processing or distribution. Its methanol production unit comprises Foster-Wheeler-designed twin steam methane reformers for synthesis gas production, over two Lurgi-designed parallel low-pressure, water-cooled reactors and approximately four distillation columns. The Haldor-Topsoe-designed ammonia synthesis loop at its facility processes hydrogen produced by methanol production process.
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