Koppers (NYSE: KOP) and Verenium (NASDAQ:VRNM) are both small-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.

Analyst Ratings

This is a summary of current recommendations and price targets for Koppers and Verenium, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Koppers 0 1 3 0 2.75
Verenium 0 0 0 0 N/A

Koppers currently has a consensus target price of $45.75, suggesting a potential downside of 7.95%. Given Koppers’ higher probable upside, equities analysts plainly believe Koppers is more favorable than Verenium.

Insider & Institutional Ownership

89.3% of Koppers shares are owned by institutional investors. 3.9% of Koppers shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Koppers and Verenium’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Koppers 3.54% 119.06% 7.05%
Verenium N/A N/A N/A

Volatility & Risk

Koppers has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Verenium has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Earnings & Valuation

This table compares Koppers and Verenium’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Koppers $1.42 billion 0.73 $29.30 million $2.36 21.06
Verenium N/A N/A N/A ($1.56) -2.56

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

Summary

Koppers beats Verenium on 10 of the 10 factors compared between the two stocks.

About Koppers

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.

About Verenium

Verenium Corporation (Verenium) is an industrial biotechnology company. The Company develops and commercializes enzymes for use in a range of industrial processes. It manufactures and markets its enzyme products in the fields of animal health and nutrition, grain processing, oilfield services and other industrial processes, such as pulp and paper and textiles. As of December 31, 2012, it marketed commercial enzyme products, either independently or in collaboration with its partners. In addition, it has developed a pipeline of enzyme product candidates. Its products are organized into four product lines: animal health and nutrition, grain processing, oilfield services and other industrial processes. As of December 31, 2012, it markets nine commercial enzyme products. In October 2013, BASF SE acquired 71% stake in the Company.

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