Critical Comparison: Orion Engineered Carbons S.A (OEC) versus Ferro (NYSE:FOE)

Orion Engineered Carbons S.A (NYSE: OEC) and Ferro (NYSE:FOE) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.

Profitability

This table compares Orion Engineered Carbons S.A and Ferro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orion Engineered Carbons S.A 5.50% 137.36% 8.91%
Ferro 3.44% 35.77% 7.57%

Dividends

Orion Engineered Carbons S.A pays an annual dividend of $0.81 per share and has a dividend yield of 3.6%. Ferro does not pay a dividend. Orion Engineered Carbons S.A pays out 69.2% of its earnings in the form of a dividend.

Insider & Institutional Ownership

54.6% of Orion Engineered Carbons S.A shares are held by institutional investors. Comparatively, 97.9% of Ferro shares are held by institutional investors. 2.0% of Ferro shares are held by company 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 & Valuation

This table compares Orion Engineered Carbons S.A and Ferro’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Orion Engineered Carbons S.A $1.14 billion 1.18 $49.38 million $1.17 19.44
Ferro $1.15 billion 1.73 -$20.81 million $0.53 44.66

Orion Engineered Carbons S.A has higher earnings, but lower revenue than Ferro. Orion Engineered Carbons S.A is trading at a lower price-to-earnings ratio than Ferro, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Orion Engineered Carbons S.A has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Ferro has a beta of 1.9, indicating that its share price is 90% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Orion Engineered Carbons S.A and Ferro, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orion Engineered Carbons S.A 0 1 4 0 2.80
Ferro 0 0 4 0 3.00

Orion Engineered Carbons S.A presently has a consensus target price of $25.40, indicating a potential upside of 11.65%. Ferro has a consensus target price of $23.00, indicating a potential downside of 2.83%. Given Orion Engineered Carbons S.A’s higher possible upside, research analysts clearly believe Orion Engineered Carbons S.A is more favorable than Ferro.

Summary

Ferro beats Orion Engineered Carbons S.A on 8 of the 15 factors compared between the two stocks.

About Orion Engineered Carbons S.A

Orion Engineered Carbons S.A. is a producer of carbon black. The Company operates through two segments: Specialty Carbon Black and Rubber Carbon Black. The Specialty Carbon Black segment is engaged in the production of specialty carbon black. The Rubber Carbon Black segment is involved in the production of rubber carbon black. As of December 31, 2016, it operated a diversified carbon black business with over 280 specialty carbon black grades and approximately 80 rubber carbon black grades. Carbon black is used as a pigment and as a performance additive in coatings, polymers, printing and special applications (specialty carbon black), and in the reinforcement of rubber in tires and mechanical rubber goods (rubber carbon black). As of December 31, 2016, it operated a global platform of 13 production facilities in Europe, North and South America, Asia and South Africa and three sales companies, as well as one jointly-owned production plant in Germany.

About Ferro

Ferro Corporation (Ferro) produces specialty materials that are sold to a range of manufacturers. The Company’s segments include Performance Coatings; Performance Colors and Glass, and Pigments, Powders and Oxides. Its Performance Coatings segment includes Tile Coating Systems and Porcelain Enamel. Its manufacturers make products for various end-use markets. The Company’s products fall into two general categories: functional coatings, which perform specific functions in the manufacturing processes and end products of its customers, and color solutions, which provide aesthetic and performance characteristics to its customers’ products. Its products are used in a range of product applications in markets, including appliances, automobiles, building and renovation, electronics, household furnishings, industrial products and packaging.

Receive News & Ratings for Orion Engineered Carbons S.A Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Orion Engineered Carbons S.A and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply