Contrasting Air Products and Chemicals (NYSE:APD) and Johnson Matthey (OTCMKTS:JMPLY)

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

Dividends

Air Products and Chemicals pays an annual dividend of $7.20 per share and has a dividend yield of 2.5%. Johnson Matthey pays an annual dividend of $1.16 per share and has a dividend yield of 1.9%. Air Products and Chemicals pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Air Products and Chemicals has raised 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.

Volatility and Risk

Air Products and Chemicals has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Johnson Matthey has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Air Products and Chemicals and Johnson Matthey, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Air Products and Chemicals	0	6	10	1	2.71
Johnson Matthey	1	2	1	2	2.67

Air Products and Chemicals currently has a consensus target price of $323.12, indicating a potential upside of 11.60%. Given Air Products and Chemicals’ stronger consensus rating and higher possible upside, analysts clearly believe Air Products and Chemicals is more favorable than Johnson Matthey.

Earnings & Valuation

This table compares Air Products and Chemicals and Johnson Matthey”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Air Products and Chemicals	$12.46 billion	5.17	-$394.50 million	$9.45	30.64
Johnson Matthey	$14.89 billion	0.34	$475.91 million	N/A	N/A

Johnson Matthey has higher revenue and earnings than Air Products and Chemicals.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Air Products and Chemicals	16.91%	16.11%	6.92%
Johnson Matthey	N/A	N/A	N/A

Institutional and Insider Ownership

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

Summary

Air Products and Chemicals beats Johnson Matthey on 11 of the 16 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 Johnson Matthey

Johnson Matthey is a global leader in science that enables a cleaner and healthier world. With over 200 years of sustained commitment to innovation and technological breakthroughs, they improve the function, performance and safety of their customers’ products. Their science has a global impact in areas such as low emission transport, pharmaceuticals, chemical processing and making the most efficient use of the planet’s natural resources. Today more than 13,000 Johnson Matthey professionals collaborate with their network of customers and partners to make a real difference to the world around us.