Head to Head Review: Versum Materials (VSM) & The Competition

Versum Materials (NYSE: VSM) is one of 47 publicly-traded companies in the “Specialty Chemicals” industry, but how does it compare to its peers? We will compare Versum Materials to related businesses based on the strength of its institutional ownership, valuation, profitability, earnings, analyst recommendations, dividends and risk.

Dividends

Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Versum Materials pays out 11.3% of its earnings in the form of a dividend. As a group, “Specialty Chemicals” companies pay a dividend yield of 1.3% and pay out 26.5% of their earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings and price targets for Versum Materials and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Versum Materials 0 4 6 0 2.60
Versum Materials Competitors 167 1012 1273 24 2.47

Versum Materials currently has a consensus price target of $36.11, suggesting a potential downside of 7.83%. As a group, “Specialty Chemicals” companies have a potential downside of 2.91%. Given Versum Materials’ peers higher possible upside, analysts plainly believe Versum Materials has less favorable growth aspects than its peers.

Profitability

This table compares Versum Materials and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Versum Materials 17.13% -457.02% 17.84%
Versum Materials Competitors -6.70% -1.91% 3.35%

Volatility & Risk

Versum Materials has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500. Comparatively, Versum Materials’ peers have a beta of 1.46, indicating that their average share price is 46% more volatile than the S&P 500.

Earnings and Valuation

This table compares Versum Materials and its peers revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Versum Materials $1.13 billion $193.00 million 22.14
Versum Materials Competitors $2.01 billion $127.25 million 267.69

Versum Materials’ peers have higher revenue, but lower earnings than Versum Materials. Versum Materials is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

90.0% of Versum Materials shares are held by institutional investors. Comparatively, 66.5% of shares of all “Specialty Chemicals” companies are held by institutional investors. 0.5% of Versum Materials shares are held by company insiders. Comparatively, 7.6% of shares of all “Specialty Chemicals” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Versum Materials beats its peers on 8 of the 15 factors compared.

Versum Materials Company Profile

Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.

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