AdvanSix (NYSE:ASIX) vs. Quaker Houghton (NYSE:KWR) Financial Analysis

Quaker Houghton (NYSE:KWR) and AdvanSix (NYSE:ASIX) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Insider and Institutional Ownership

77.5% of Quaker Houghton shares are held by institutional investors. Comparatively, 86.4% of AdvanSix shares are held by institutional investors. 1.1% of Quaker Houghton shares are held by insiders. Comparatively, 5.6% of AdvanSix shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Quaker Houghton and AdvanSix”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quaker Houghton	$1.84 billion	1.61	$116.64 million	($0.49)	-349.14
AdvanSix	$1.52 billion	0.33	$44.15 million	$1.92	9.83

Quaker Houghton has higher revenue and earnings than AdvanSix. Quaker Houghton is trading at a lower price-to-earnings ratio than AdvanSix, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Quaker Houghton has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500. Comparatively, AdvanSix has a beta of 1.73, indicating that its stock price is 73% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Quaker Houghton and AdvanSix, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quaker Houghton	1	2	3	0	2.33
AdvanSix	1	1	1	0	2.00

Quaker Houghton presently has a consensus price target of $158.67, indicating a potential downside of 7.25%. AdvanSix has a consensus price target of $28.67, indicating a potential upside of 51.92%. Given AdvanSix’s higher possible upside, analysts clearly believe AdvanSix is more favorable than Quaker Houghton.

Profitability

This table compares Quaker Houghton and AdvanSix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quaker Houghton	-0.48%	8.64%	4.31%
AdvanSix	3.52%	7.14%	3.50%

Dividends

Quaker Houghton pays an annual dividend of $2.03 per share and has a dividend yield of 1.2%. AdvanSix pays an annual dividend of $0.64 per share and has a dividend yield of 3.4%. Quaker Houghton pays out -414.3% of its earnings in the form of a dividend. AdvanSix pays out 33.3% 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. Quaker Houghton has increased its dividend for 17 consecutive years and AdvanSix has increased its dividend for 2 consecutive years.

Summary

Quaker Houghton beats AdvanSix on 9 of the 17 factors compared between the two stocks.

About Quaker Houghton

Quaker Chemical Corporation, together with its subsidiaries, develops, produces, and markets various formulated specialty chemical products for a range of heavy industrial and manufacturing applications in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die-cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids, and surface treatment chemicals. The company also provides chemical management services. It serves steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies. The company was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.

About AdvanSix

AdvanSix Inc. engages in the manufacture and sale of polymer resins in the United States and internationally. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam to manufacture polymer resins; ammonium sulfate fertilizers to distributors, farm cooperatives, and retailers; and acetone that are used in the production of adhesives, paints, coatings, solvents, herbicides, and engineered plastic resins, as well as other intermediate chemicals, including phenol, monoisopropylamine, dipropylamine, monoallylamine, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, acetaldehyde oxime, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. The company sells its products directly, as well as through distributors. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.