Nexeo Solutions (NASDAQ:NXEO) and Balchem (NASDAQ:BCPC) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, valuation, earnings and profitability.
Insider & Institutional Ownership
97.8% of Nexeo Solutions shares are held by institutional investors. Comparatively, 91.1% of Balchem shares are held by institutional investors. 0.6% of Nexeo Solutions shares are held by company insiders. Comparatively, 1.0% of Balchem shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Nexeo Solutions and Balchem’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Balchem pays an annual dividend of $0.47 per share and has a dividend yield of 0.5%. Nexeo Solutions does not pay a dividend. Balchem pays out 18.6% of its earnings in the form of a dividend. Balchem has raised its dividend for 8 consecutive years.
Valuation and Earnings
This table compares Nexeo Solutions and Balchem’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Nexeo Solutions||$4.03 billion||0.23||$29.40 million||$0.74||13.86|
|Balchem||$594.79 million||4.68||$90.07 million||$2.53||34.15|
Balchem has lower revenue, but higher earnings than Nexeo Solutions. Nexeo Solutions is trading at a lower price-to-earnings ratio than Balchem, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Nexeo Solutions has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, Balchem has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.
This is a summary of current ratings and price targets for Nexeo Solutions and Balchem, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Nexeo Solutions presently has a consensus target price of $14.00, suggesting a potential upside of 36.45%. Balchem has a consensus target price of $109.33, suggesting a potential upside of 26.56%. Given Nexeo Solutions’ higher probable upside, research analysts plainly believe Nexeo Solutions is more favorable than Balchem.
Balchem beats Nexeo Solutions on 12 of the 17 factors compared between the two stocks.
Nexeo Solutions Company Profile
Nexeo Solutions, Inc. operates as a chemical and plastic products distributor in North America, Europe, the Middle East, Africa, and Asia. It operates through Chemicals, Plastics, and Environmental Services segments. The company provides approximately 24,000 products that are used in various industries, including household, industrial and institutional, lubricants, automotive, healthcare, personal care, oil and gas, and construction, as well as performance coatings, including architectural coatings, adhesives, sealants, and elastomers. It also offers on-site and off-site hazardous and non-hazardous environmental services, including waste collection, transportation, recovery, disposal arrangement, and recycling services. The company was formerly known as WL Ross Holding Corp. and changed its name to Nexeo Solutions, Inc. in June 2016. Nexeo Solutions, Inc. was founded in 2014 and is headquartered in The Woodlands, Texas.
Balchem Company Profile
Balchem Corporation develops, manufactures, and markets specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, medical sterilization, and industrial markets in the United States and internationally. The company's Human Nutrition & Health segment supplies ingredients in the food and beverage industry. Its products include creamer and chocolate systems, dairy replacers, powdered fats, nutritional beverage bases, beverages, juice and dairy bases, ice cream bases and variegates, cereals, grain based snacks, and cereal based ingredients. This segment also offers microencapsulation solutions; and human grade choline nutrients and mineral amino acid chelated products for wellness applications. Its Animal Nutrition & Health segment provides microencapsulated products to enhance health and milk production in ruminant animals; chelation technology, which offers enhanced nutrient absorption for various species of production and companion animals; and choline chloride, a nutrient for monogastric animal health. The company's Specialty Products segment offers ethylene oxide primarily for use in the health care industry; and single use canisters with ethylene oxide for sterilizing re-usable devices. It also sells propylene oxide, a fumigant to aid in the control of insects and microbiological spoilage, as well as to reduce bacterial and mold contamination in shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs, and prunes; and chelated minerals for high value crops. The company's Industrial Products segment provides choline chloride derivatives for hydraulic fracturing of shale natural gas wells; and methylamines, which are building blocks for the manufacture of choline products, as well as used in industrial applications. The company sells its products through sales force, independent distributors, and sales agents. Balchem Corporation was founded in 1967 and is headquartered in New Hampton, New York.
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