Comparing Nexeo Solutions (NXEO) & Koninklijke DSM (RDSMY)

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Nexeo Solutions (OTCMKTS: RDSMY) and Koninklijke DSM (OTCMKTS:RDSMY) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Institutional and Insider Ownership

95.2% of Nexeo Solutions shares are held by institutional investors. Comparatively, 0.1% of Koninklijke DSM shares are held by institutional investors. 0.6% of Nexeo Solutions 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.

Profitability

This table compares Nexeo Solutions and Koninklijke DSM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nexeo Solutions 1.45% 8.13% 2.20%
Koninklijke DSM 22.77% 14.36% 7.75%

Analyst Ratings

This is a summary of current recommendations and price targets for Nexeo Solutions and Koninklijke DSM, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nexeo Solutions 0 1 2 0 2.67
Koninklijke DSM 0 0 1 0 3.00

Nexeo Solutions currently has a consensus target price of $12.50, suggesting a potential upside of 25.13%. Given Nexeo Solutions’ higher possible upside, research analysts clearly believe Nexeo Solutions is more favorable than Koninklijke DSM.

Volatility and Risk

Nexeo Solutions has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Koninklijke DSM has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Earnings and Valuation

This table compares Nexeo Solutions and Koninklijke DSM’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nexeo Solutions $3.64 billion 0.25 $14.40 million $0.33 30.27
Koninklijke DSM $9.75 billion 1.89 $2.00 billion $1.11 22.86

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

Dividends

Koninklijke DSM pays an annual dividend of $0.38 per share and has a dividend yield of 1.5%. Nexeo Solutions does not pay a dividend. Koninklijke DSM pays out 34.2% of its earnings in the form of a dividend.

Summary

Koninklijke DSM beats Nexeo Solutions on 10 of the 16 factors compared between the two stocks.

About Nexeo Solutions

Nexeo Solutions, Inc. operates as a chemical and plastic products distributor in North America, Europe, the Middle East, Africa, and Asia. The company operates through Chemicals, Plastics, and Environmental Services segments. It provides approximately 22,000 products used in various industries, including household, industrial and institutional, lubricants, architectural coatings, adhesives, sealants, elastomers, automotive, healthcare, personal care, oil and gas, and construction. The company was formerly known as WL Ross Holding Corp. and changed its name to Nexeo Solutions, Inc. in June 2016. Nexeo Solutions, Inc. was founded in 2014 and is based in The Woodlands, Texas.

About Koninklijke DSM

Koninklijke DSM N.V., a science-based company, engages in health, nutrition, and materials businesses worldwide. The company operates through three segments: Nutrition, Materials, and Innovation Center. The Nutrition segment offers nutrients, such as vitamins, carotenoids, nutritional lipids, and other ingredients to feed, food, pharmaceutical, and personal care industries; and food enzymes, cultures, yeast extracts, savory flavors, hydrocolloids, and other specialty ingredients for use in dairy, baking, beverage, and savory applications. The Materials segment provides Dyneema, a fiber solution serving textiles, commercial marine, and sports segments; high-performance plastics primarily for use in automotive and electronics markets, as well as offers solutions to specialized industries, including water management, breathable textiles, and flexible food packaging; and resins solutions for paints and coatings, fiber optic coatings, and 3D printing applications. The Innovation Center segment offers cellulosic bio-ethanol and bio-based succinic acids; anti-reflective coatings for solar glass; and anti-soiling coatings for use in cleaning and maintaining solar farms in desert-like conditions. This segment also produces biomedical materials and technologies that enable medical device manufacturers to enhance care across various medical specialties. Koninklijke DSM N.V. was founded in 1902 and is headquartered in Heerlen, the Netherlands.

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