Head to Head Survey: Sherwin-Williams (NYSE:SHW) & Neo Performance Materials (OTCMKTS:NOPMF)

Neo Performance Materials (OTCMKTS:NOPMF) and Sherwin-Williams (NYSE:SHW) are both materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, institutional ownership, analyst recommendations, profitability and earnings.

Profitability

This table compares Neo Performance Materials and Sherwin-Williams’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neo Performance Materials	0.26%	11.52%	6.47%
Sherwin-Williams	11.01%	67.97%	11.16%

Analyst Ratings

This is a summary of current ratings and recommmendations for Neo Performance Materials and Sherwin-Williams, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neo Performance Materials	0	1	2	1	3.00
Sherwin-Williams	0	10	16	1	2.67

Sherwin-Williams has a consensus target price of $382.08, suggesting a potential upside of 13.40%. Given Sherwin-Williams’ higher probable upside, analysts plainly believe Sherwin-Williams is more favorable than Neo Performance Materials.

Dividends

Neo Performance Materials pays an annual dividend of $0.29 per share and has a dividend yield of 1.7%. Sherwin-Williams pays an annual dividend of $3.20 per share and has a dividend yield of 0.9%. Neo Performance Materials pays out -2,900.0% of its earnings in the form of a dividend. Sherwin-Williams pays out 29.5% 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. Sherwin-Williams has increased its dividend for 48 consecutive years. Neo Performance Materials is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

77.7% of Sherwin-Williams shares are held by institutional investors. 0.2% of Sherwin-Williams shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Neo Performance Materials and Sherwin-Williams”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neo Performance Materials	$478.79 million	1.67	-$9.98 million	($0.01)	-1,738.00
Sherwin-Williams	$23.57 billion	3.47	$2.57 billion	$10.85	31.05

Sherwin-Williams has higher revenue and earnings than Neo Performance Materials. Neo Performance Materials is trading at a lower price-to-earnings ratio than Sherwin-Williams, indicating that it is currently the more affordable of the two stocks.

Summary

Sherwin-Williams beats Neo Performance Materials on 13 of the 16 factors compared between the two stocks.

About Neo Performance Materials

Neo Performance Materials Inc. engages in the manufacture and sale of rare earth, magnetic powders, magnets, and rare metal-based functional materials in Canada and internationally. The company operates in three segments: Magnequench, Chemicals and Oxides, and Rare Metals. The Magnequench segment produces magnetic powders that are used in bonded and hot deformed fully dense neodymium-iron-boron magnets; and bonded magnets. Its powders are used in the production of bonded permanent magnets that are components in automotive motors, pumps, micro motors, traction motors, sensors, and other applications. The Chemicals and Oxides segments manufactures and distributes a range of industrial materials for use in auto catalysts, consumer electronics, petroleum refining, hybrid and electric vehicles, and municipal and industrial wastewater treatment applications. The Rare Metals segment sources, produces, reclaims, refines, and markets high-temperature metals that include tantalum, niobium, hafnium, and rhenium; and electronic metals, such as gallium and indium for jet engines, medical imaging, wireless technologies, and LED lightings, as well as flat panel displays, solar, steel additives, batteries, and electronic applications. The company was founded in 1994 and is headquartered in Toronto, Canada.

About Sherwin-Williams

The Sherwin-Williams Company engages in the development, manufacture, distribution, and sale of paints, coating, and related products to professional, industrial, commercial, and retail customers. It operates through three segments: Paint Stores Group, Consumer Brands Group, and Performance Coatings Group. The Paint Stores Group segment offers architectural paints and coatings, and protective and marine products, as well as OEM product finishes and related products for architectural and industrial paint contractors, and do-it-yourself homeowners. The Consumer Brands Group segment supplies a portfolio of branded and private-label architectural paints, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks, and adhesives to retailers, including home centers and hardware stores, and dedicated dealers and distributors. The Performance Coatings Group segment develops and sells industrial coatings for wood finishing and general industrial applications, automotive refinish products, protective and marine coatings, coil coatings, packaging coatings, and performance-based resins and colorants. It serves retailers, dealers, jobbers, licensees, and other third-party distributors through its branches and direct sales staff, as well as through outside sales representatives. The company has operations primarily in the North and South America, the Caribbean, Europe, Asia, and Australia. The Sherwin-Williams Company was founded in 1866 and is headquartered in Cleveland, Ohio.