Innospec (NASDAQ:IOSP – Get Free Report) and Lsb Industries (NYSE:LXU – Get Free Report) are both small-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, profitability, risk and valuation.
Risk and Volatility
Innospec has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Lsb Industries has a beta of 0.38, meaning that its stock price is 62% less volatile than the S&P 500.
Institutional & Insider Ownership
96.6% of Innospec shares are held by institutional investors. Comparatively, 73.7% of Lsb Industries shares are held by institutional investors. 1.5% of Innospec shares are held by company insiders. Comparatively, 3.0% of Lsb Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Innospec | 1 | 1 | 0 | 0 | 1.50 |
| Lsb Industries | 0 | 5 | 0 | 0 | 2.00 |
Lsb Industries has a consensus price target of $15.50, indicating a potential upside of 0.43%. Given Lsb Industries’ stronger consensus rating and higher possible upside, analysts plainly believe Lsb Industries is more favorable than Innospec.
Earnings & Valuation
This table compares Innospec and Lsb Industries”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Innospec | $1.78 billion | 1.11 | $116.60 million | $4.59 | 17.53 |
| Lsb Industries | $615.21 million | 1.80 | $24.61 million | $0.63 | 24.50 |
Innospec has higher revenue and earnings than Lsb Industries. Innospec is trading at a lower price-to-earnings ratio than Lsb Industries, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Innospec and Lsb Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Innospec | 6.38% | 9.32% | 6.79% |
| Lsb Industries | 7.16% | 8.91% | 3.96% |
Summary
Innospec beats Lsb Industries on 7 of the 13 factors compared between the two stocks.
About Innospec
Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals in the United States, rest of North America, the United Kingdom, rest of Europe, and internationally. The company's Fuel Specialties segment offers a range of specialty chemical products that are used as additives in additives in diesel, jet, marine, fuel oil and other fuels. This segment's products are used in the operation of commercial trucking, marine and aviation engines, power station generators, heating oil, and other industrial machinery applications. Its Performance Chemicals segment provides technology-based solutions for its customers' processes or products that focuses on the personal care, home care, agrochemical, construction, mining, and other industrial markets. The company's Oilfield Services segment develops and markets chemical solutions for drilling, completion, fracturing, stimulation, and completion operations; and products for oil and gas production. It sells its products primarily to oil and gas exploration and production companies, oil refineries, fuel manufacturers and users, personal care and home care companies, formulators of agrochemical, and other chemical and industrial companies. The company was formerly known as Octel Corp. and changed its name to Innospec Inc. in January 2006. Innospec Inc. was founded in 1938 and is headquartered in Englewood, Colorado.
About Lsb Industries
LSB Industries, Inc. engages in the manufacture, marketing, and sale of chemical products. The company provides nitrogen-based fertilizers, such as ammonia, fertilizer grade high density ammonium nitrate (HDAN), and urea ammonia nitrate for fertilizer for corn, pastures, and other crops, as well as nitrogen, phosphorus, and potassium (NPK) fertilizer blends application. It also offers high purity and commercial grade ammonia, high purity ammonium nitrate, sulfuric acids, mixed nitrating acids, carbon dioxide, and diesel exhaust fluids, as well as concentrated, and blended and regular nitric acids for various applications, including semiconductor, nylon, and polyurethane intermediates, ammonium nitrate, and metal processing; chemical feedstocks, emissions abatement, water treatments, and refrigerants; pulp and paper, aluminum, water treatment, metals, and vanadium processing; abatement for diesel vehicles; and food refrigeration, dry ice, and enhanced oil recovery. In addition, the company provides industrial grade and low density ammonium nitrate, and ammonium nitrate for explosives mining, quarries, and other blasting activities. It sells its products through distributors, as well as directly to end customers in the United States and other parts of North America. The company serves to the agricultural, industrial, and mining markets. LSB Industries, Inc. was incorporated in 1968 and is headquartered in Oklahoma City, Oklahoma.
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