Analyzing China Carbon Graphite Group (OTCMKTS:CHGI) and Innospec (NASDAQ:IOSP)

Innospec (NASDAQ:IOSP) and China Carbon Graphite Group (OTCMKTS:CHGI) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.

Valuation and Earnings

This table compares Innospec and China Carbon Graphite Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Innospec	$1.85 billion	1.16	$35.60 million	($0.03)	-2,886.00
China Carbon Graphite Group	N/A	N/A	N/A	N/A	N/A

Innospec has higher revenue and earnings than China Carbon Graphite Group.

Institutional and Insider Ownership

96.6% of Innospec shares are owned by institutional investors. 1.3% of Innospec shares are owned by insiders. Comparatively, 5.5% of China Carbon Graphite Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Innospec and China Carbon Graphite Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Innospec	1	1	0	0	1.50
China Carbon Graphite Group	0	0	0	0	0.00

Given China Carbon Graphite Group’s higher possible upside, analysts clearly believe China Carbon Graphite Group is more favorable than Innospec.

Risk and Volatility

Innospec has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, China Carbon Graphite Group has a beta of -1.58, meaning that its share price is 258% less volatile than the S&P 500.

Profitability

This table compares Innospec and China Carbon Graphite Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Innospec	-0.07%	10.28%	7.35%
China Carbon Graphite Group	N/A	N/A	N/A

Summary

Innospec beats China Carbon Graphite Group on 6 of the 9 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 China Carbon Graphite Group

China Carbon Graphite Group, Inc., together with its subsidiaries, engages in the research and development, manufacture, rework, and sale of graphene, graphene oxide, carbon graphite felt, and graphite bipolar plates in the People's Republic of China. Its graphene oxide is used as a conductive agent in lithium ion batteries, super capacitors, rubber and plastic additives, conductive inks, special coatings, transparent conductive thin films, and chips; and graphite bipolar plates are used in solar power storage. The company operates roycarbon.com, a business-to-business and business-to-consumers Internet portal for graphite related products. China Carbon Graphite Group, Inc. was founded in 1986 and is based in Diamond Bar, California.