Quaker Chemical (NYSE: KWR) and Valvoline (NYSE:VVV) are both mid-cap basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, valuation, institutional ownership, analyst recommendations, earnings and risk.
Insider & Institutional Ownership
92.1% of Quaker Chemical shares are owned by institutional investors. Comparatively, 95.5% of Valvoline shares are owned by institutional investors. 3.2% of Quaker Chemical shares are owned by insiders. Comparatively, 0.1% of Valvoline shares are owned 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.
This table compares Quaker Chemical and Valvoline’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Quaker Chemical||$820.08 million||2.49||$20.27 million||$5.01||30.58|
|Valvoline||$2.08 billion||2.00||$304.00 million||$1.39||15.00|
Valvoline has higher revenue and earnings than Quaker Chemical. Valvoline is trading at a lower price-to-earnings ratio than Quaker Chemical, indicating that it is currently the more affordable of the two stocks.
This table compares Quaker Chemical and Valvoline’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings for Quaker Chemical and Valvoline, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Quaker Chemical currently has a consensus price target of $162.00, indicating a potential upside of 5.72%. Valvoline has a consensus price target of $25.67, indicating a potential upside of 23.10%. Given Valvoline’s higher possible upside, analysts clearly believe Valvoline is more favorable than Quaker Chemical.
Volatility & Risk
Quaker Chemical has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Valvoline has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.
Quaker Chemical pays an annual dividend of $1.42 per share and has a dividend yield of 0.9%. Valvoline pays an annual dividend of $0.30 per share and has a dividend yield of 1.4%. Quaker Chemical pays out 28.3% of its earnings in the form of a dividend. Valvoline pays out 21.6% 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. Quaker Chemical has raised its dividend for 8 consecutive years. Valvoline is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valvoline beats Quaker Chemical on 9 of the 16 factors compared between the two stocks.
About Quaker Chemical
Quaker Chemical Corporation develops, produces, and markets various formulated chemical specialty products for a range of heavy industrial and manufacturing applications in North America, Europe, the Middle East, Africa, the Asia/Pacific, and South America. Its products include rolling lubricants used by manufacturers of steel in the hot and cold rolling of steel, and aluminum in the hot rolling of aluminum; machining and grinding compounds for use in cutting, shaping, and grinding metal parts; hydraulic fluids for steel, metalworking, and other customers to operate hydraulic equipment; corrosion preventives to protect metals during manufacture, storage, and shipment; and specialty greases used in automotive and aerospace production processes, steel manufacturing, and various other applications. The company also provides metal finishing compounds to prepare metal surfaces for special treatments, such as galvanizing and tin plating, as well as to prepare metal for further processing; forming compounds used to facilitate the drawing and extrusion of metal products; chemical milling maskants for the aerospace industry; and temporary and permanent coatings for metal and concrete products. In addition, it offers construction products comprising flexible sealants and protective coatings for various applications; bio-lubricants used in machinery in forestry and construction industries; and die casting lubricants, as well as provides chemical management services. The company serves steel, aluminum, automotive, mining, aerospace, tube and pipe, cans, and other industries. Quaker Chemical Corporation markets and sells its products directly, as well as through distributors and agents. The company was formerly known as Quaker Chemical Products Corporation and changed its name to Quaker Chemical Corporation in August 1962. Quaker Chemical Corporation was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.
Valvoline Inc. manufactures and markets engine and automotive maintenance products and services. It operates through three segments: Core North America, Quick Lubes, and International. The company offers lubricants for passenger car/light duty and heavy duty; antifreeze/coolants for original equipment manufacturers; functional and maintenance chemicals, such as brake fluids and power steering fluids, as well as specialty coatings for automotive and industrial applications comprising rust prevention and sound absorption; and oil and air filters for light-duty vehicles. It also provides windshield wiper blades, light bulbs, serpentine belts, and drain plugs. Valvoline Inc. sells its products through approximately 1,100 Valvoline branded franchised and company-owned stores. The company also serves car dealers, general repair shops, and third-party quick lube locations. It has operations in North America, Europe, the Asia Pacific, Latin America, and other countries. Valvoline Inc. was founded in 1866 and is headquartered in Lexington, Kentucky.
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