Critical Comparison: Novozymes A/S (OTCMKTS:NVZMY) and Sensient Technologies (NYSE:SXT)

Novozymes A/S (OTCMKTS:NVZMY) and Sensient Technologies (NYSE:SXT) are both materials companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Insider & Institutional Ownership

0.0% of Novozymes A/S shares are owned by institutional investors. Comparatively, 90.9% of Sensient Technologies shares are owned by institutional investors. 1.3% of Sensient Technologies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Novozymes A/S and Sensient Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novozymes A/S	0	1	0	2	3.33
Sensient Technologies	0	2	3	0	2.60

Sensient Technologies has a consensus price target of $139.67, indicating a potential upside of 17.12%. Given Sensient Technologies’ higher possible upside, analysts clearly believe Sensient Technologies is more favorable than Novozymes A/S.

Valuation and Earnings

This table compares Novozymes A/S and Sensient Technologies”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novozymes A/S	$4.70 billion	6.07	$660.28 million	$1.69	40.73
Sensient Technologies	$1.61 billion	3.15	$134.49 million	$3.97	30.04

Novozymes A/S has higher revenue and earnings than Sensient Technologies. Sensient Technologies is trading at a lower price-to-earnings ratio than Novozymes A/S, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Novozymes A/S and Sensient Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Novozymes A/S	15.59%	6.56%	4.37%
Sensient Technologies	9.69%	14.08%	7.44%

Dividends

Novozymes A/S pays an annual dividend of $0.39 per share and has a dividend yield of 0.6%. Sensient Technologies pays an annual dividend of $1.64 per share and has a dividend yield of 1.4%. Novozymes A/S pays out 23.1% of its earnings in the form of a dividend. Sensient Technologies pays out 41.3% 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.

Volatility and Risk

Novozymes A/S has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500. Comparatively, Sensient Technologies has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

About Novozymes A/S

Novozymes A/S produces and sells industrial enzymes, microorganisms, and probiotics in Denmark, rest of Europe, North America, Asia Pacific, the Middle East, Africa, Latin America, and internationally. The company offers protein solutions for the food and beverage industry. It also offers industrial hygiene, drain openers, hard surface, medical cleaning, septic tanks, ware washing, and professional laundry services. In addition, the company provides dishwashing, softener, microbial and medical cleaning services. Further, it provides corn, cotton, forages, peanuts, pulses, soybeans, wheat, small grains, bioyield, and biocontrol solutions; warm water species, recirculating aquaculture system; animal health and nutrition solutions; fiber modification, bleach boosting, deposit control, and starch modification solutions. Additionally, the company provides carbon capture, leather and textiles solutions; enzyme solutions, including corn and wheat separation, liquefaction, saccharification, filtration, isomerization, maltose, and specialties solutions; warm water species and recirculating aquaculture system solutions; human health solutions, comprising brain, oral, protective and immune, and gastrointestinal health solutions; ethanol, biodiesel, renewable diesel, education, wastewater, and sewage sludge, and renewable diesel solutions; agriculture and industry, biogas food waste, food waste, biocatalysis, cell culture, diagnostics, enzyme, and biogas solutions. Furthermore, it provides lipases, proteases, oxidoreductases, and carbohydrases. Novozymes A/S was founded in 1925 and is based in Bagsvaerd, Denmark.

About Sensient Technologies

Sensient Technologies Corporation, together with its subsidiaries, develops, manufactures, and markets colors, flavors, and other specialty ingredients in North America, Europe, Asia, Australia, South America, and Africa. The company offers flavor-delivery systems, and compounded and blended products; ingredient products, such as essential oils, natural and synthetic flavors, and natural extracts; and chili powder, paprika, and chili pepper, as well as dehydrated vegetables comprising parsley, celery, and spinach to the food, beverage, and personal care industries. It also provides natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, including colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications under the Sensient Food Colors, Sensient Pharmaceutical Coating Systems, Sensient Cosmetic Technologies, and Sensient Specialty Markets trade names. Sensient Technologies Corporation was incorporated in 1882 and is headquartered in Milwaukee, Wisconsin.