Head to Head Survey: Koppers (NYSE:KOP) versus Gulf Resources (NASDAQ:GURE)

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Gulf Resources and Koppers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gulf Resources	1	0	0	0	1.00
Koppers	0	2	2	0	2.50

Koppers has a consensus target price of $52.50, indicating a potential upside of 82.10%. Given Koppers’ stronger consensus rating and higher possible upside, analysts clearly believe Koppers is more favorable than Gulf Resources.

Volatility and Risk

Gulf Resources has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, Koppers has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Earnings & Valuation

This table compares Gulf Resources and Koppers”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gulf Resources	$7.66 million	0.94	-$58.94 million	($48.05)	-0.11
Koppers	$2.09 billion	0.27	$52.40 million	$0.80	36.04

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

Insider and Institutional Ownership

3.3% of Gulf Resources shares are owned by institutional investors. Comparatively, 92.8% of Koppers shares are owned by institutional investors. 3.2% of Gulf Resources shares are owned by insiders. Comparatively, 6.9% of Koppers shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Gulf Resources and Koppers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gulf Resources	-286.77%	-20.62%	-17.50%
Koppers	0.84%	16.48%	4.46%

Summary

Koppers beats Gulf Resources on 13 of the 14 factors compared between the two stocks.

About Gulf Resources

Gulf Resources, Inc., through its subsidiaries, manufactures and trades bromine and crude salt, chemical products, and natural gas in the People’s Republic of China. The company operates through four segments: Bromine, Crude salt, Chemical products, and Natural gas segments. It also provides bromine for use in bromine compounds, intermediates in organic synthesis, brominated flame retardants, fumigants, water purification compounds, dyes, medicines, and disinfectants. In addition, the company offers crude salt for use as a material in alkali and chlorine alkali production for use in the chemical, food and beverage, and other industries. In addition, it manufactures and sells chemical products for use in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, and inorganic chemicals, as well as materials that are used for human and animal antibiotics. The company is based in Shouguang, the People’s Republic of China.

About Koppers

Koppers Holdings Inc. provides treated wood products, wood preservation chemicals, and carbon compounds in the United States, Australasia, Europe, and internationally. The company operates through Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC), and Carbon Materials and Chemicals (CMC) segments. The RUPS segment procures and treats crossties, switch ties, and various types of lumber used for railroad bridges and crossings. It also provides rail joint bars to join rails together for railroads; transmission and distribution poles for electric and telephone utilities; and pilings. This segment provides railroad services, such as engineering, design, repair, and inspection services for railroad bridges. The PC segment develops, manufactures, and markets copper-based wood preservatives, including micronized copper azole, micronized pigments, alkaline copper quaternary, amine copper azole, and chromated copper arsenate for decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses; and supplies fire-retardant chemicals for pressure treatment of wood primarily in commercial construction. The CMC segment manufactures creosote for the treatment of wood or as a feedstock in the production of carbon black; carbon pitch, a raw material used in the production of aluminum and steel; naphthalene for use as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete; phthalic anhydride for the production of plasticizers, polyester resins, and alkyd paints; and carbon black feedstock for use in the production of carbon black. It serves the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber, and construction sectors. Koppers Holdings Inc. was founded in 1988 and is based in Pittsburgh, Pennsylvania.