Critical Contrast: Innospec (NASDAQ:IOSP) & DuPont de Nemours (NYSE:DD)

Innospec (NASDAQ:IOSP) and DuPont de Nemours (NYSE:DD) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Insider & Institutional Ownership

96.6% of Innospec shares are held by institutional investors. Comparatively, 74.0% of DuPont de Nemours shares are held by institutional investors. 1.5% of Innospec shares are held by insiders. Comparatively, 1.0% of DuPont de Nemours shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Innospec and DuPont de Nemours’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Innospec	6.38%	9.32%	6.79%
DuPont de Nemours	-0.30%	7.15%	4.57%

Dividends

Innospec pays an annual dividend of $1.84 per share and has a dividend yield of 2.3%. DuPont de Nemours pays an annual dividend of $0.80 per share and has a dividend yield of 1.7%. Innospec pays out 40.1% of its earnings in the form of a dividend. DuPont de Nemours pays out -1,333.3% 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. Innospec has increased its dividend for 11 consecutive years. Innospec is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Innospec has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, DuPont de Nemours has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Earnings and Valuation

This table compares Innospec and DuPont de Nemours”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innospec	$1.78 billion	1.12	$116.60 million	$4.59	17.58
DuPont de Nemours	$6.85 billion	2.78	-$779.00 million	($0.06)	-782.07

Innospec has higher earnings, but lower revenue than DuPont de Nemours. DuPont de Nemours is trading at a lower price-to-earnings ratio than Innospec, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Innospec and DuPont de Nemours, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innospec	0	2	0	0	2.00
DuPont de Nemours	1	3	12	0	2.69

DuPont de Nemours has a consensus price target of $55.21, suggesting a potential upside of 17.67%. Given DuPont de Nemours’ stronger consensus rating and higher possible upside, analysts clearly believe DuPont de Nemours is more favorable than Innospec.

Summary

Innospec beats DuPont de Nemours on 10 of the 17 factors compared between the two stocks.

About Innospec

Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals in the United States, rest of North America, the United Kingdom, rest of Europe, and internationally. The company's Fuel Specialties segment offers a range of specialty chemical products that are used as additives in additives in diesel, jet, marine, fuel oil and other fuels. This segment's products are used in the operation of commercial trucking, marine and aviation engines, power station generators, heating oil, and other industrial machinery applications. Its Performance Chemicals segment provides technology-based solutions for its customers' processes or products that focuses on the personal care, home care, agrochemical, construction, mining, and other industrial markets. The company's Oilfield Services segment develops and markets chemical solutions for drilling, completion, fracturing, stimulation, and completion operations; and products for oil and gas production. It sells its products primarily to oil and gas exploration and production companies, oil refineries, fuel manufacturers and users, personal care and home care companies, formulators of agrochemical, and other chemical and industrial companies. The company was formerly known as Octel Corp. and changed its name to Innospec Inc. in January 2006. Innospec Inc. was founded in 1938 and is headquartered in Englewood, Colorado.

About DuPont de Nemours

DuPont de Nemours, Inc. provides technology-based materials and solutions in the United States, Canada, the Asia Pacific, Latin America, Europe, the Middle East, and Africa. It operates through Electronics & Industrial, Water & Protection, and Corporate & Other segments. The Electronics & Industrial segment supplies materials and solutions for the fabrication of semiconductors and integrated circuits. This segment also provides semiconductor and advanced packaging materials; dielectric and metallization solutions for chip packaging; and silicones for light emitting diode packaging and semiconductor applications; permanent and process chemistries for the fabrication of printed circuit boards to include laminates and substrates, and electroless and electrolytic metallization solutions, and electromagnetic shielding and thermal management solutions, as well as patterning solutions, and materials and metallization processes for metal finishing, decorative, and industrial applications. In addition, it offers various materials to manufacture rigid and flexible displays for organic light emitting diode, and other display applications; provides high performance parts, and specialty silicone elastomers, and lubricants to automotive, aerospace, electronics, industrial, and healthcare markets; and photopolymer plates and platemaking systems used in flexographic printing, and digital inks for textile, commercial, and home-office printing applications. The Water & Protection segment provides engineered products and integrated systems for worker safety, water purification and separation, transportation, energy, medical packaging and building materials. The Corporate & Other segment offers auto adhesives and fluids; Multibase; and Tedlar products. The company was formerly known as DowDuPont Inc. and changed its name to DuPont de Nemours, Inc. in June 2019. DuPont de Nemours, Inc. was incorporated in 2015 and is headquartered in Wilmington, Delaware.