Critical Contrast: Orion Engineered Carbons S.A (OEC) & Sensient Technologies (SXT)
Orion Engineered Carbons S.A (NYSE: OEC) and Sensient Technologies (NYSE:SXT) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.
Volatility and Risk
Orion Engineered Carbons S.A has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500. Comparatively, Sensient Technologies has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for Orion Engineered Carbons S.A and Sensient Technologies, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Orion Engineered Carbons S.A||0||1||4||0||2.80|
Orion Engineered Carbons S.A presently has a consensus price target of $25.40, indicating a potential upside of 9.96%. Sensient Technologies has a consensus price target of $89.15, indicating a potential upside of 16.54%. Given Sensient Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Sensient Technologies is more favorable than Orion Engineered Carbons S.A.
Institutional and Insider Ownership
54.6% of Orion Engineered Carbons S.A shares are held by institutional investors. Comparatively, 90.2% of Sensient Technologies shares are held by institutional investors. 1.0% of Sensient Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Orion Engineered Carbons S.A pays an annual dividend of $0.81 per share and has a dividend yield of 3.5%. Sensient Technologies pays an annual dividend of $1.32 per share and has a dividend yield of 1.7%. Orion Engineered Carbons S.A pays out 69.2% of its earnings in the form of a dividend. Sensient Technologies pays out 54.5% 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. Sensient Technologies has increased its dividend for 5 consecutive years.
This table compares Orion Engineered Carbons S.A and Sensient Technologies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Orion Engineered Carbons S.A||5.50%||137.36%||8.91%|
Valuation & Earnings
This table compares Orion Engineered Carbons S.A and Sensient Technologies’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Orion Engineered Carbons S.A||$1.14 billion||1.20||$49.38 million||$1.17||19.74|
|Sensient Technologies||$1.38 billion||2.40||$126.25 million||$2.42||31.61|
Sensient Technologies has higher revenue and earnings than Orion Engineered Carbons S.A. Orion Engineered Carbons S.A is trading at a lower price-to-earnings ratio than Sensient Technologies, indicating that it is currently the more affordable of the two stocks.
Sensient Technologies beats Orion Engineered Carbons S.A on 13 of the 17 factors compared between the two stocks.
Orion Engineered Carbons S.A Company Profile
Orion Engineered Carbons S.A. is a producer of carbon black. The Company operates through two segments: Specialty Carbon Black and Rubber Carbon Black. The Specialty Carbon Black segment is engaged in the production of specialty carbon black. The Rubber Carbon Black segment is involved in the production of rubber carbon black. As of December 31, 2016, it operated a diversified carbon black business with over 280 specialty carbon black grades and approximately 80 rubber carbon black grades. Carbon black is used as a pigment and as a performance additive in coatings, polymers, printing and special applications (specialty carbon black), and in the reinforcement of rubber in tires and mechanical rubber goods (rubber carbon black). As of December 31, 2016, it operated a global platform of 13 production facilities in Europe, North and South America, Asia and South Africa and three sales companies, as well as one jointly-owned production plant in Germany.
Sensient Technologies Company Profile
Sensient Technologies Corporation is a manufacturer and marketer of colors, flavors and fragrances. The Company uses technologies at facilities around the world to develop specialty food and beverage systems, cosmetic and pharmaceutical systems, specialty inks and colors, and other specialty and fine chemicals. The Company’s three segments include the Flavors & Fragrances Group and the Color Group, which are managed on a product-and-services basis, and the Asia Pacific Group, which is managed on a geographic basis. The Company’s principal products include flavors, flavor enhancers and bionutrients; fragrances, aroma chemicals and essential oils; natural ingredients, including dehydrated vegetables and other food ingredients; natural and synthetic food and beverage colors; cosmetic colors and ingredients and pharmaceutical excipients and ingredients, and technical colors, specialty inks and colors, and specialty dyes and pigments.
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