Air Products and Chemicals (NYSE:APD) vs. Brenntag (OTCMKTS:BNTGY) Critical Analysis

Air Products and Chemicals (NYSE:APD) and Brenntag (OTCMKTS:BNTGY) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, dividends and valuation.

Risk & Volatility

Air Products and Chemicals has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, Brenntag has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.

Profitability

This table compares Air Products and Chemicals and Brenntag’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Air Products and Chemicals	16.91%	16.11%	6.92%
Brenntag	1.55%	5.38%	2.17%

Institutional & Insider Ownership

81.7% of Air Products and Chemicals shares are owned by institutional investors. 1.9% of Air Products and Chemicals shares are owned 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.

Dividends

Air Products and Chemicals pays an annual dividend of $7.20 per share and has a dividend yield of 2.6%. Brenntag pays an annual dividend of $0.26 per share and has a dividend yield of 2.0%. Air Products and Chemicals pays out 76.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brenntag pays out 70.3% of its earnings in the form of a dividend. Air Products and Chemicals has raised its dividend for 43 consecutive years. Air Products and Chemicals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Air Products and Chemicals and Brenntag”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Air Products and Chemicals	$12.46 billion	5.03	-$394.50 million	$9.45	29.81
Brenntag	$17.16 billion	0.54	$299.37 million	$0.37	34.97

Brenntag has higher revenue and earnings than Air Products and Chemicals. Air Products and Chemicals is trading at a lower price-to-earnings ratio than Brenntag, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Air Products and Chemicals and Brenntag, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Air Products and Chemicals	0	6	10	1	2.71
Brenntag	1	8	0	0	1.89

Air Products and Chemicals presently has a consensus target price of $323.12, indicating a potential upside of 14.71%. Brenntag has a consensus target price of $12.80, indicating a potential downside of 1.08%. Given Air Products and Chemicals’ stronger consensus rating and higher probable upside, analysts clearly believe Air Products and Chemicals is more favorable than Brenntag.

Summary

Air Products and Chemicals beats Brenntag on 14 of the 18 factors compared between the two stocks.

About Air Products and Chemicals

Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and related services in the Americas, Asia, Europe, the Middle East, India, and internationally. The company produces atmospheric gases, including oxygen, nitrogen, and argon; process gases, such as hydrogen, helium, carbon dioxide, carbon monoxide, and syngas; and specialty gases for customers in various industries, including refining, chemical, manufacturing, electronics, energy production, medical, food, and metals. It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The company was founded in 1940 and is headquartered in Allentown, Pennsylvania.

About Brenntag

Brenntag SE purchases and supplies various industrial and specialty chemicals, and ingredients in Germany, Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates in two segments, Brenntag Essentials and Brenntag Specialties. It provides just-in-time delivery, product mixing, blending, repackaging, inventory management, and drum return handling. The company serves customers in various end-market industries, including nutrition, pharma, personal care, water treatment, and lubricants; and home, industrial, and institutional markets, as well as coatings and constructions, polymers, and rubber industries. The company was founded in 1874 and is based in Essen, Germany.