Critical Review: FUCHS (OTCMKTS:FUPBY) and AdvanSix (NYSE:ASIX)

FUCHS (OTCMKTS:FUPBY) and AdvanSix (NYSE:ASIX) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for FUCHS and AdvanSix, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FUCHS	1	0	0	0	1.00
AdvanSix	0	0	1	0	3.00

AdvanSix has a consensus target price of $33.50, suggesting a potential upside of 40.56%. Given AdvanSix’s stronger consensus rating and higher probable upside, analysts clearly believe AdvanSix is more favorable than FUCHS.

Risk and Volatility

FUCHS has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, AdvanSix has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500.

Profitability

This table compares FUCHS and AdvanSix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FUCHS	8.46%	16.23%	11.55%
AdvanSix	5.45%	11.38%	5.65%

Valuation and Earnings

This table compares FUCHS and AdvanSix”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FUCHS	$3.81 billion	1.95	$326.79 million	$0.63	21.19
AdvanSix	$1.52 billion	0.42	$44.15 million	$3.12	7.64

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

Dividends

FUCHS pays an annual dividend of $0.17 per share and has a dividend yield of 1.3%. AdvanSix pays an annual dividend of $0.64 per share and has a dividend yield of 2.7%. FUCHS pays out 27.0% of its earnings in the form of a dividend. AdvanSix pays out 20.5% 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. AdvanSix has increased its dividend for 2 consecutive years. AdvanSix is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

86.4% of AdvanSix shares are held by institutional investors. 5.6% of AdvanSix shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

AdvanSix beats FUCHS on 10 of the 17 factors compared between the two stocks.

About FUCHS

Fuchs SE develops, produces, and sells lubricants and related specialties in Europe, the Middle East, Africa, the Asia Pacific, and North and South America. The company offers automotive lubricants, such as biodegradable lubricants, central and mobile hydraulic oils, dry coatings, engine and gear oils, motorcycle/two wheelers, and service fluids, as well as various oils for agriculture sector. It also provides industrial lubricants, including chain lubricants, dry coatings, gear and hydraulic oils, machine oils, open gear lubricants, rapidly biodegradable lubricants, compressor and refrigeration oils, release agents, slideways oils, fluids and industrial oils, textile machine oils, and turbine oils. In addition, the company offers lubricating greases comprising assembly pastes, biodegradable greases, food grade greases, multi-purpose/long-life greases, pastes for extreme temperatures, perfluorinated pastes, and wheel bearing greases, as well as gear boxes, and greases for central lubricating system, extreme temperature, machine tools, plain and roller bearings, rail vehicles, spray cans or rattle cans, and solid lubricants. Further, it provides metal processing lubricants consisting of cleaners, corrosion preventives, cutting and grinding, forming lubricants, and quenching oils; and special application lubricants for application equipment, chain lubrication, dry coatings, food and beverage, gears, sugar processing, railway traffic, plain and roller bearings, glass manufacturing process, hot forming, maintenance, open gears, pastes, release agents, other specialties, special greases, and wind power plants. Additionally, the company offers open gear and surface coating services. The company was formerly known as Fuchs Petrolub SE and changed its name to Fuchs SE in July 2023. Fuchs SE was founded in 1931 and is headquartered in Mannheim, Germany.

About AdvanSix

AdvanSix Inc. engages in the manufacture and sale of polymer resins in the United States and internationally. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam to manufacture polymer resins; ammonium sulfate fertilizers to distributors, farm cooperatives, and retailers; and acetone that are used in the production of adhesives, paints, coatings, solvents, herbicides, and engineered plastic resins, as well as other intermediate chemicals, including phenol, monoisopropylamine, dipropylamine, monoallylamine, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, acetaldehyde oxime, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. The company sells its products directly, as well as through distributors. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.