W.R. Grace & Co. (NYSE: GRA) and OCI Partners (NYSE:OCIP) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.
W.R. Grace & Co. pays an annual dividend of $0.84 per share and has a dividend yield of 1.2%. OCI Partners pays an annual dividend of $0.32 per share and has a dividend yield of 3.7%. W.R. Grace & Co. pays out 38.0% of its earnings in the form of a dividend. OCI Partners pays out -533.3% 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. OCI Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
W.R. Grace & Co. has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500. Comparatively, OCI Partners has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.
Insider & Institutional Ownership
84.8% of W.R. Grace & Co. shares are held by institutional investors. Comparatively, 15.0% of OCI Partners shares are held by institutional investors. 1.3% of W.R. Grace & Co. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares W.R. Grace & Co. and OCI Partners’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|W.R. Grace & Co.||$1.60 billion||3.06||$94.10 million||$2.21||32.64|
|OCI Partners||$258.23 million||2.90||-$50.55 million||($0.06)||-143.33|
W.R. Grace & Co. has higher revenue and earnings than OCI Partners. OCI Partners is trading at a lower price-to-earnings ratio than W.R. Grace & Co., indicating that it is currently the more affordable of the two stocks.
This table compares W.R. Grace & Co. and OCI Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|W.R. Grace & Co.||8.54%||48.03%||6.40%|
This is a breakdown of current recommendations for W.R. Grace & Co. and OCI Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|W.R. Grace & Co.||0||3||7||0||2.70|
W.R. Grace & Co. presently has a consensus price target of $81.22, suggesting a potential upside of 12.59%. OCI Partners has a consensus price target of $7.00, suggesting a potential downside of 18.60%. Given W.R. Grace & Co.’s stronger consensus rating and higher possible upside, analysts clearly believe W.R. Grace & Co. is more favorable than OCI Partners.
W.R. Grace & Co. beats OCI Partners on 13 of the 16 factors compared between the two stocks.
W.R. Grace & Co. Company Profile
W. R. Grace & Co. (Grace) is engaged in the production and sale of specialty chemicals and specialty materials. The Company operates in two segments: Grace Catalysts Technologies and Grace Materials Technologies. The Grace Catalysts Technologies segment includes catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications. The Grace Materials Technologies segment includes specialty materials, including silica-based and silica-alumina-based materials, used in coatings, consumer, industrial, and pharmaceutical applications. It Grace Catalysts Technologies segment produces and sells catalysts and related products and technologies used in refining, petrochemical and other chemical manufacturing applications, including Fluid catalytic cracking catalysts (FCC), Hydroprocessing catalysts (HPC), and Polyolefin catalysts and catalyst supports.
OCI Partners Company Profile
OCI Partners LP owns and operates an integrated methanol and ammonia production facility that is located on the Texas Gulf Coast near Beaumont. The Company has an annual methanol production capacity of approximately 912,500 metric tons and an annual ammonia production capacity of approximately 331,000 metric tons. It purchases natural gas from third parties and processes the natural gas into synthesis gas, which it then further processes in the production of methanol and ammonia. It stores and sells the processed methanol and ammonia to industrial and commercial customers for further processing or distribution. Its methanol production unit comprises Foster-Wheeler-designed twin steam methane reformers for synthesis gas production, over two Lurgi-designed parallel low-pressure, water-cooled reactors and approximately four distillation columns. The Haldor-Topsoe-designed ammonia synthesis loop at its facility processes hydrogen produced by methanol production process.
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