Praxair (NYSE: PX) and Koppers Holdings (NYSE:KOP) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.

Institutional and Insider Ownership

85.3% of Praxair shares are owned by institutional investors. Comparatively, 87.8% of Koppers Holdings shares are owned by institutional investors. 0.2% of Praxair shares are owned by company insiders. Comparatively, 3.9% of Koppers Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Praxair and Koppers Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Praxair 2 7 6 0 2.27
Koppers Holdings 0 1 3 0 2.75

Praxair currently has a consensus price target of $144.27, indicating a potential downside of 2.15%. Koppers Holdings has a consensus price target of $45.75, indicating a potential downside of 4.79%. Given Praxair’s higher probable upside, analysts clearly believe Praxair is more favorable than Koppers Holdings.

Dividends

Praxair pays an annual dividend of $3.15 per share and has a dividend yield of 2.1%. Koppers Holdings does not pay a dividend. Praxair pays out 56.0% of its earnings in the form of a dividend. Praxair has increased its dividend for 12 consecutive years and Koppers Holdings has increased its dividend for 5 consecutive years.

Volatility and Risk

Praxair has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Koppers Holdings has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Valuation & Earnings

This table compares Praxair and Koppers Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Praxair $10.92 billion 3.87 $3.54 billion $5.62 26.24
Koppers Holdings $1.41 billion 0.71 $169.90 million $1.98 24.27

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

Profitability

This table compares Praxair and Koppers Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Praxair 14.56% 27.13% 8.34%
Koppers Holdings 3.02% 153.51% 6.24%

Summary

Praxair beats Koppers Holdings on 11 of the 17 factors compared between the two stocks.

Praxair Company Profile

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.

Koppers Holdings Company Profile

Koppers Holdings Inc. is a global integrated provider of treated wood products, wood treatment chemicals and carbon compounds. The Company operates through three segments: Railroad and Utility Products and Services (RUPS), Carbon Materials and Chemicals (CMC) and Performance Chemicals (PC). The RUPS business sells treated and untreated wood products, rail joint bars and services primarily to the railroad markets. The primary products supplied by PC business are copper-based wood preservatives, including micronized copper quaternary and micronized copper azole (MicroPro), micronized pigments (MicroShades) and chromated copper arsenate. Through CMC business, the Company processes coal tar into a range of products, including carbon pitch, creosote and carbon black feedstock. Its products and services are used in a range of markets, including the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber and construction industries.

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