Contrasting Basf (OTCMKTS:BASFY) and Koppers (NYSE:KOP)

Koppers (NYSE:KOP) and Basf (OTCMKTS:BASFY) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, profitability, dividends, analyst recommendations, risk, valuation and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Koppers	0.84%	16.48%	4.46%
Basf	0.43%	6.86%	3.07%

Risk and Volatility

Koppers has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Basf has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.

Valuation and Earnings

This table compares Koppers and Basf”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koppers	$2.09 billion	0.31	$52.40 million	$0.80	40.73
Basf	$70.63 billion	N/A	$1.40 billion	$0.10	145.10

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

Insider & Institutional Ownership

92.8% of Koppers shares are owned by institutional investors. Comparatively, 0.0% of Basf shares are owned by institutional investors. 6.9% of Koppers shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Koppers and Basf, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koppers	1	1	2	0	2.25
Basf	3	2	2	0	1.86

Koppers currently has a consensus target price of $52.50, indicating a potential upside of 61.12%. Given Koppers’ stronger consensus rating and higher possible upside, equities analysts clearly believe Koppers is more favorable than Basf.

Dividends

Koppers pays an annual dividend of $0.32 per share and has a dividend yield of 1.0%. Basf pays an annual dividend of $0.44 per share and has a dividend yield of 3.0%. Koppers pays out 40.0% of its earnings in the form of a dividend. Basf pays out 440.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Koppers has raised its dividend for 2 consecutive years.

Summary

Koppers beats Basf on 11 of the 15 factors compared between the two stocks.

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.

About Basf

BASF SE operates as a chemical company worldwide. It operates through six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Agricultural Solutions. The Chemicals segment provides petrochemicals and intermediates. The Materials segment offers advanced materials and their precursors for applications and systems comprising isocyanates, polyamides, and inorganic basic products, as well as specialties for plastics and plastics processing industries. The Industrial Solutions segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, resins, additives, electronic materials, and antioxidants for automotive, plastics, paints and coatings, electronics, and energy and resource industries. The Surface Technologies segment provides automotive OEM and refinish coatings, surface treatment, catalysts, battery materials, and precious and base metal services for the automotive and chemical sectors. The Nutrition & Care segment offers ingredients for consumer goods in the areas of nutrition, home, personal care, and technical applications; and serves the food and feed producers, pharmaceutical, cosmetics, detergents, cleaners, and crop protection industries, as well as fast-moving consumer goods sector. The Agricultural Solutions segment provides seeds and seed treatment products; fungicides, herbicides, insecticides, and biological crop protection products; and digital farming solutions. The company engages in engineering and other; rental and leasing; and commodity trading activities. BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany.