Financial Survey: Tokuyama (OTCMKTS:TKYMY) and Air Products and Chemicals (NYSE:APD)

Air Products and Chemicals (NYSE:APD) and Tokuyama (OTCMKTS:TKYMY) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.

Profitability

This table compares Air Products and Chemicals and Tokuyama’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Air Products and Chemicals	-2.73%	15.77%	6.75%
Tokuyama	7.42%	9.05%	5.00%

Institutional & Insider Ownership

81.7% of Air Products and Chemicals shares are held by institutional investors. 1.9% of Air Products and Chemicals shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Air Products and Chemicals has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Tokuyama has a beta of 0.12, suggesting that its share price is 88% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Air Products and Chemicals and Tokuyama, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Air Products and Chemicals	1	7	8	0	2.44
Tokuyama	0	0	0	0	0.00

Air Products and Chemicals currently has a consensus price target of $295.88, indicating a potential upside of 8.81%. Given Air Products and Chemicals’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Air Products and Chemicals is more favorable than Tokuyama.

Dividends

Air Products and Chemicals pays an annual dividend of $7.16 per share and has a dividend yield of 2.6%. Tokuyama pays an annual dividend of $0.26 per share and has a dividend yield of 2.0%. Air Products and Chemicals pays out -474.2% of its earnings in the form of a dividend. Tokuyama pays out 22.2% 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. Air Products and Chemicals has increased its dividend for 43 consecutive years. Air Products and Chemicals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Air Products and Chemicals and Tokuyama”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Air Products and Chemicals	$12.04 billion	5.03	-$394.50 million	($1.51)	-180.08
Tokuyama	$2.25 billion	0.83	$154.35 million	$1.17	11.09

Tokuyama has lower revenue, but higher earnings than Air Products and Chemicals. Air Products and Chemicals is trading at a lower price-to-earnings ratio than Tokuyama, indicating that it is currently the more affordable of the two stocks.

Summary

Air Products and Chemicals beats Tokuyama on 13 of the 17 factors compared between the two stocks.

About Air Products and Chemicals

Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and related services in the Americas, Asia, Europe, the Middle East, India, and internationally. The company produces atmospheric gases, including oxygen, nitrogen, and argon; process gases, such as hydrogen, helium, carbon dioxide, carbon monoxide, and syngas; and specialty gases for customers in various industries, including refining, chemical, manufacturing, electronics, energy production, medical, food, and metals. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania.

About Tokuyama

Tokuyama Corporation produces and sells various chemical products in Japan. The company operates through six segments: Chemicals, Cement, Electronics and Advanced Materials, Life Science, Eco Business, and Others. The Chemicals segment offers caustic soda, soda ash, calcium chloride, sodium silicate cullet, sodium bicarbonate, purified, vinyl chloride monomer, polyvinyl chloride resin, propylene oxide, methylene chloride, and chloroform. The Cement segment provides cement, ready-mixed concrete, and cement-type stabilizer, as well as engages in the resource recycling business. The Electronic and Advanced Materials segment provides polycrystalline silicon; fumed silica and tetrachlorosilane; aluminum nitride; high-purity chemicals for electronics manufacturing and photoresist developer; and isopropyl alcohol. The Life Science segment provides medical diagnosis systems, dental materials and equipment, pharmaceutical ingredients and intermediates, plastic lens-related materials for glasses, and microporous film. The Eco Business segment offers plastic window sashes, ion exchange membranes, as well as engages in waste gypsum board recycling activity. The company was formerly known as Tokuyama Soda Co., Ltd. and changed its name to Tokuyama Corporation in April 1994. Tokuyama Corporation was incorporated in 1918 and is headquartered in Tokyo, Japan.