Innospec (NASDAQ:IOSP) versus Sumitomo Chemcl (OTCMKTS:SOMMY) Head-To-Head Analysis

Sumitomo Chemcl (OTCMKTS:SOMMY) and Innospec (NASDAQ:IOSP) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Risk & Volatility

Sumitomo Chemcl has a beta of 0.25, suggesting that its share price is 75% less volatile than the S&P 500. Comparatively, Innospec has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500.

Dividends

Sumitomo Chemcl pays an annual dividend of $0.26 per share and has a dividend yield of 1.7%. Innospec pays an annual dividend of $1.74 per share and has a dividend yield of 2.3%. Sumitomo Chemcl pays out 15.0% of its earnings in the form of a dividend. Innospec pays out -5,800.0% 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. Innospec has increased its dividend for 11 consecutive years. Innospec is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Sumitomo Chemcl and Innospec, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sumitomo Chemcl	0	1	0	0	2.00
Innospec	2	0	0	1	2.00

Profitability

This table compares Sumitomo Chemcl and Innospec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sumitomo Chemcl	3.43%	7.72%	2.42%
Innospec	-0.07%	10.28%	7.35%

Institutional & Insider Ownership

96.6% of Innospec shares are held by institutional investors. 1.3% of Innospec shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Sumitomo Chemcl and Innospec”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sumitomo Chemcl	$17.12 billion	0.29	$254.70 million	$1.73	8.62
Innospec	$1.85 billion	1.01	$35.60 million	($0.03)	-2,501.33

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

Summary

Innospec beats Sumitomo Chemcl on 10 of the 15 factors compared between the two stocks.

About Sumitomo Chemcl

Sumitomo Chemical Company, Limited engages in Chemicals & Plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Essential Chemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; resorcinol for tires, wood adhesives, flame retardants, and ultraviolet ray absorbants; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists and polymer OLED for LC and OLED displays; photoresists and high-purity chemicals for the semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.

About Innospec

Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals in the United States, rest of North America, the United Kingdom, rest of Europe, and internationally. The company's Fuel Specialties segment offers a range of specialty chemical products that are used as additives in additives in diesel, jet, marine, fuel oil and other fuels. This segment's products are used in the operation of commercial trucking, marine and aviation engines, power station generators, heating oil, and other industrial machinery applications. Its Performance Chemicals segment provides technology-based solutions for its customers' processes or products that focuses on the personal care, home care, agrochemical, construction, mining, and other industrial markets. The company's Oilfield Services segment develops and markets chemical solutions for drilling, completion, fracturing, stimulation, and completion operations; and products for oil and gas production. It sells its products primarily to oil and gas exploration and production companies, oil refineries, fuel manufacturers and users, personal care and home care companies, formulators of agrochemical, and other chemical and industrial companies. The company was formerly known as Octel Corp. and changed its name to Innospec Inc. in January 2006. Innospec Inc. was founded in 1938 and is headquartered in Englewood, Colorado.