FMC (NASDAQ: IPHS) and Innophos (NASDAQ:IPHS) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.
Volatility & Risk
FMC has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500. Comparatively, Innophos has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.
Earnings & Valuation
This table compares FMC and Innophos’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|FMC||$2.88 billion||3.95||$535.80 million||$2.71||31.16|
|Innophos||$722.02 million||1.19||$22.44 million||$2.46||17.81|
FMC has higher revenue and earnings than Innophos. Innophos is trading at a lower price-to-earnings ratio than FMC, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for FMC and Innophos, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
FMC currently has a consensus price target of $102.07, indicating a potential upside of 20.88%. Given FMC’s stronger consensus rating and higher possible upside, equities research analysts clearly believe FMC is more favorable than Innophos.
FMC pays an annual dividend of $0.66 per share and has a dividend yield of 0.8%. Innophos pays an annual dividend of $1.92 per share and has a dividend yield of 4.4%. FMC pays out 24.4% of its earnings in the form of a dividend. Innophos pays out 78.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FMC has raised its dividend for 7 consecutive years.
Institutional & Insider Ownership
87.5% of FMC shares are held by institutional investors. Comparatively, 95.7% of Innophos shares are held by institutional investors. 1.2% of FMC shares are held by company insiders. Comparatively, 2.2% of Innophos shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares FMC and Innophos’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
FMC beats Innophos on 14 of the 17 factors compared between the two stocks.
FMC Corporation, a diversified chemical company, provides solutions, applications, and products for the agricultural, consumer, and industrial markets worldwide. The company operates in two segments, FMC Agricultural Solutions and FMC Lithium. The FMC Agricultural Solutions segment develops, manufactures, markets, and sells crop protection chemicals, including insecticides, herbicides, and fungicides that are used in agriculture to enhance crop yield and quality by controlling a range of insects, weeds, and diseases, as well as in non-agricultural markets for pest control. The FMC Lithium segment manufactures lithium for use in batteries, polymers, pharmaceuticals, greases and lubricants, glass and ceramics, and other industrial uses. FMC Corporation was founded in 1883 and is headquartered in Philadelphia, Pennsylvania.
Innophos Holdings, Inc., together with its subsidiaries, produces specialty ingredients with applications in food, health, nutrition, and industrial markets. It operates through three segments: Food, Health and Nutrition; Industrial Specialties; and Other. The company's specialty ingredients include specialty phosphate salts and specialty phosphoric acids, as well as other mineral, enzyme, and botanical based specialty ingredients that are used as flavor enhancers in beverages; electrolytes in sports drinks; texture modifiers in cheeses; leavening agents in baked goods; calcium and phosphorus fortification in food and beverages; moisture and color retention in seafood, poultry, and meat; excipients in vitamins, minerals, nutritional supplements, and pharmaceuticals; and abrasives in toothpaste. It also provides food and technical grade purified phosphoric acid (PPA) used in the production of phosphate salts, as well as in food and beverages, and water treatment applications; technical grade sodium tripolyphosphate (STPP), a specialty phosphate, which is used as an ingredient in cleaning products, such as industrial and institutional cleaners, automatic dishwashing detergents, and consumer laundry detergents, as well as in water treatment, clay processing, and copper ore processing activities; and detergent grade PPA that is primarily used in the production of STPP. In addition, the company offers granular triple super-phosphate (GTSP), a fertilizer product line used for enhancing crop yields in various agricultural sectors; and merchant green phosphoric acid. It serves primarily consumer goods manufacturers, distributors, and specialty chemical manufacturers in the United States, Canada, Mexico, and internationally. Innophos Holdings, Inc. was founded in 2004 and is headquartered in Cranbury, New Jersey.
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