Comparing Quaker Houghton (NYSE:KWR) and Neo Performance Materials (OTCMKTS:NOPMF)

Quaker Houghton (NYSE:KWR) and Neo Performance Materials (OTCMKTS:NOPMF) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Insider & Institutional Ownership

77.5% of Quaker Houghton shares are held by institutional investors. 1.0% of Quaker Houghton shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Quaker Houghton and Neo Performance Materials, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quaker Houghton	0	2	4	0	2.67
Neo Performance Materials	0	1	2	1	3.00

Quaker Houghton currently has a consensus price target of $186.00, suggesting a potential upside of 20.40%. Given Quaker Houghton’s higher possible upside, equities research analysts clearly believe Quaker Houghton is more favorable than Neo Performance Materials.

Profitability

This table compares Quaker Houghton and Neo Performance Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quaker Houghton	4.80%	9.84%	4.81%
Neo Performance Materials	1.43%	13.10%	7.17%

Valuation and Earnings

This table compares Quaker Houghton and Neo Performance Materials”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quaker Houghton	$1.89 billion	1.41	-$2.49 million	$5.59	27.64
Neo Performance Materials	$478.79 million	1.77	-$9.98 million	($0.01)	-1,845.00

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

Dividends

Quaker Houghton pays an annual dividend of $2.12 per share and has a dividend yield of 1.4%. Neo Performance Materials pays an annual dividend of $0.29 per share and has a dividend yield of 1.6%. Quaker Houghton pays out 37.9% of its earnings in the form of a dividend. Neo Performance Materials pays out -2,900.0% 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 raised its dividend for 17 consecutive years. Neo Performance Materials is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Quaker Houghton beats Neo Performance Materials on 10 of the 17 factors compared between the two stocks.

About Quaker Houghton

Quaker Houghton is a global provider of industrial process fluids and specialty chemicals. Its products include metalworking fluids, industrial lubricants, hydraulic fluids, cleaners, corrosion-prevention products, and coatings used in manufacturing and other industrial operations. The company serves customers across industries such as steel and aluminum production, automotive, aerospace, mining, and general machinery. Its solutions are designed to support processes including metal forming, machining, heat treatment, and equipment operation.

About Neo Performance Materials

Neo Performance Materials is a Canadian advanced materials company that produces specialized materials used in applications including electric motors, consumer electronics, automotive systems, and industrial equipment. Its business focuses on materials derived from rare earths and other specialty metals. The company operates through three main businesses. Magnequench makes magnetic powders and bonded magnets used in compact, high-performance motors and other devices. Chemicals and Oxides produces rare earth materials, including separated oxides and related products, while Rare Metals supplies specialty metals and compounds for industrial and technology applications.