Ferro (NYSE: FOE) and Chemtura (NYSE:CHMT) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Profitability

This table compares Ferro and Chemtura’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ferro 3.44% 35.77% 7.57%
Chemtura 5.71% 9.00% 4.02%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Ferro and Chemtura, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ferro 0 0 4 0 3.00
Chemtura 0 0 0 0 N/A

Ferro presently has a consensus price target of $23.00, suggesting a potential downside of 2.46%. Given Ferro’s higher possible upside, analysts clearly believe Ferro is more favorable than Chemtura.

Institutional & Insider Ownership

97.3% of Ferro shares are owned by institutional investors. Comparatively, 93.1% of Chemtura shares are owned by institutional investors. 2.0% of Ferro shares are owned by company insiders. Comparatively, 2.6% of Chemtura shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Ferro and Chemtura’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ferro $1.15 billion 1.73 -$20.81 million $0.53 44.49
Chemtura N/A N/A N/A ($0.19) -176.32

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

Summary

Ferro beats Chemtura on 8 of the 10 factors compared between the two stocks.

About Ferro

Ferro Corporation (Ferro) produces specialty materials that are sold to a range of manufacturers. The Company’s segments include Performance Coatings (metal and ceramic coatings), Performance Colors and Glass (glass coatings), and Color Solutions. Its Performance Coatings segment includes Tile Coating Systems and Porcelain Enamel. Its manufacturers make products for various end-use markets. The Company’s products fall into two general categories: functional coatings, which perform specific functions in the manufacturing processes and end products of its customers, and color solutions, which provide aesthetic and performance characteristics to its customers’ products. Its products are used in a range of product applications in markets, including appliances, automobiles, building and renovation, electronics, household furnishings, industrial products and packaging.

About Chemtura

Chemtura Corporation is a chemical company. The Company is engaged in developing, manufacturing and marketing of engineered industrial specialty chemicals. The Company’s products are sold to industrial manufacturing customers for use as additives, ingredients or intermediates. The Company’s segments are Industrial Performance Products and Industrial Engineered Products. The Industrial Performance Products segment manufactures and markets lubricant additive components, synthetic lubricant base-stocks, synthetic finished fluids, calcium sulfonate specialty greases and phosphate and polyester based fluids, and is also engaged in the development and production of hot cast elastomer pre-polymers. The Industrial Engineered Products segment develops and manufactures bromine and bromine-based products and organometallic compounds. The Company operates in a range of industries, including automotive, building and construction, electronics, lubricants, packaging and transportation.

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