OM Group (NYSE: OMG) and Rayonier Advanced Materials (NYSE:RYAM) are both specialty chemicals – nec companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Profitability

This table compares OM Group and Rayonier Advanced Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OM Group 3.68% 4.22% 2.58%
Rayonier Advanced Materials 4.98% 18.12% 2.79%

Dividends

Rayonier Advanced Materials pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. OM Group does not pay a dividend. Rayonier Advanced Materials pays out 51.9% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for OM Group and Rayonier Advanced Materials, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OM Group 0 0 0 0 N/A
Rayonier Advanced Materials 0 1 4 0 2.80

Rayonier Advanced Materials has a consensus target price of $19.20, suggesting a potential downside of 0.41%.

Valuation & Earnings

This table compares OM Group and Rayonier Advanced Materials’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
OM Group N/A N/A N/A ($6.13) N/A
Rayonier Advanced Materials $869.00 million 0.96 $73.28 million $0.54 35.70

Rayonier Advanced Materials has higher revenue and earnings than OM Group. OM Group is trading at a lower price-to-earnings ratio than Rayonier Advanced Materials, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

95.2% of Rayonier Advanced Materials shares are held by institutional investors. 2.1% of Rayonier Advanced Materials shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Rayonier Advanced Materials beats OM Group on 9 of the 10 factors compared between the two stocks.

OM Group Company Profile

OM Group, Inc. is a United States-based industrial company. The Company is engaged in serving global markets, including automotive systems, electronic devices, aerospace and defense, industrial and medical. It operates in three business segments: Magnetic Technologies, Battery Technologies and Specialty Chemicals. Its Magnetic Technologies segment develops, manufactures and distributes industrial-use magnetic materials and related products to an array of end markets, including automotive systems, electrical installation technology, industrial, retail and renewable energy. The Company’s Battery Technologies segment provides batteries, battery management systems, and energetic devices for defense, space and medical markets. The Company’s Specialty Chemicals segment develops, produces and supplies chemicals for electronic applications, industrial applications including coatings, composites and tire, and photomasks used by customers to produce semiconductors and related products.

Rayonier Advanced Materials Company Profile

Rayonier Advanced Materials Inc. is engaged in the production of cellulose specialties. The Company’s product lines include cellulose specialties and commodity products. Its products are used in manufacturing processes. The Company’s products are sold throughout the world to companies for use in various industrial applications, and to produce a range of products, including cigarette filters, foods, pharmaceuticals, textiles and electronics. The Company focuses on producing various forms of cellulose specialties products, such as cellulose acetate and cellulose ethers. The Company’s production facilities are located in Jesup, Georgia and Fernandina Beach, Florida. The Jesup plant can produce cellulose specialties or commodity products using both hardwood and softwood in a pre-hydrolyzed kraft or high potential of hydrogen (pH) cooking process. The Fernandina Beach plant can produce cellulose specialties or commodity products using softwood in a sulfite or low pH cooking process.

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