Kraton (NYSE: KRA) and PolyOne (NYSE:POL) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.
Earnings & Valuation
This table compares Kraton and PolyOne’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kraton||$1.96 billion||0.74||$97.54 million||$2.85||16.06|
|PolyOne||$3.23 billion||1.08||-$57.70 million||$2.21||19.81|
Kraton has higher earnings, but lower revenue than PolyOne. Kraton is trading at a lower price-to-earnings ratio than PolyOne, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Kraton has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, PolyOne has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Kraton and PolyOne, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Kraton currently has a consensus target price of $56.33, indicating a potential upside of 23.08%. PolyOne has a consensus target price of $45.00, indicating a potential upside of 2.81%. Given Kraton’s higher probable upside, equities analysts plainly believe Kraton is more favorable than PolyOne.
Insider and Institutional Ownership
96.9% of Kraton shares are held by institutional investors. Comparatively, 92.0% of PolyOne shares are held by institutional investors. 3.7% of Kraton shares are held by insiders. Comparatively, 1.3% of PolyOne shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
PolyOne pays an annual dividend of $0.70 per share and has a dividend yield of 1.6%. Kraton does not pay a dividend. PolyOne pays out 31.7% of its earnings in the form of a dividend. PolyOne has raised its dividend for 6 consecutive years.
This table compares Kraton and PolyOne’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
PolyOne beats Kraton on 10 of the 17 factors compared between the two stocks.
Kraton Corporation manufactures and sells styrenic block copolymers and other engineered polymers in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Polymer and Chemical. The Polymer segment offers performance products, including styrene-butadiene-styrene and styrene-isoprene-styrene; and specialty polymers, such as hydrogenated styrenic block copolymers, as well as isoprene rubber and isoprene rubber latex for use in medical and personal care products, adhesives, tackifiers, paints, and coatings. The Chemical segment provides pine-based specialty products that include rosin-based tackifiers for packaging and pressure-sensitive adhesive applications; terpene-based tackifiers for bookbinding, hygiene, and pressure-sensitive adhesive applications; alpha-methyl-styrene (AMS) resins for bookbinding and pressure-sensitive adhesive applications; and hot melt polyamides for flexible packaging. It also provides rosin-based binders for the thermoplastic pavement marking submarket; sells tall oil fatty acids for the asphalt paving market; and produces rosin esters and insoluble maleic-based tackifiers, as well as bitumen additives. In addition, this segment offers terpene-based tread enhancement resins and AMS-based tread enhancement additives, as well as distilled tall oil and rosins for enhancing the performance and manufacturing of high performance, winter, and all-season tires. Further, it provides dimer acids, tall oil rosins, and terpene fractions for fuel additive, oilfield chemical, mining fluid, coating, metalworking fluid and lubricant, and other applications. The company sells its products through various channels, including direct sales force, marketing representatives, and distributors under the Kraton and Cariflex brands. The company was formerly known as Kraton Performance Polymers, Inc. and changed its name to Kraton Corporation in September 2016. Kraton Corporation is based in Houston, Texas.
PolyOne Corporation provides specialized polymer materials, services, and solutions in the United States, Canada, Mexico, Europe, South America, and Asia. The company operates in four segments: Color, Additives and Inks; Specialty Engineered Materials; Performance Products and Solutions; and PolyOne Distribution. The Color, Additives and Inks segment offers specialized color and additive concentrates in solid and liquid form for thermoplastics; dispersions for thermosets; and specialty inks, plastisols, and vinyl slush molding solutions. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials; and long glass and carbon fiber technology, and thermoset and thermoplastic composites. The Performance Products and Solutions segment offers products and services for vinyl molding and extrusion processors to manufacturers of durable plastic parts and consumer-oriented products. It also provides materials testing, component analysis, custom formulation development, colorant and additive, part design assistance, structural analysis, process simulation, mold design and flow analysis, and extruder screw design services, as well as contract manufacturing and outsourced polymer manufacturing services to resin producers and polymer marketers. The PolyOne Distribution segment distributes approximately 4,000 grades of engineering and commodity grade resins to custom injection molders and extruders. The company sells its products through direct sales personnel, distributors, and commissioned sales agents. PolyOne Corporation was founded in 1927 and is headquartered in Avon Lake, Ohio.
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