Financial Review: Innophos Holdings (IPHS) versus LyondellBasell Industries NV (NYSE:LYB)

Innophos Holdings (NASDAQ: IPHS) and LyondellBasell Industries NV (NYSE:LYB) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Dividends

Innophos Holdings pays an annual dividend of $1.92 per share and has a dividend yield of 4.4%. LyondellBasell Industries NV pays an annual dividend of $3.60 per share and has a dividend yield of 3.5%. Innophos Holdings pays out 88.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. LyondellBasell Industries NV pays out 38.6% of its earnings in the form of a dividend. Innophos Holdings has increased its dividend for 5 consecutive years. Innophos Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Innophos Holdings and LyondellBasell Industries NV’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Innophos Holdings $725.34 million 1.17 $47.97 million $2.17 20.06
LyondellBasell Industries NV $29.18 billion 1.41 $3.84 billion $9.33 11.17

LyondellBasell Industries NV has higher revenue and earnings than Innophos Holdings. LyondellBasell Industries NV is trading at a lower price-to-earnings ratio than Innophos Holdings, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

94.5% of Innophos Holdings shares are held by institutional investors. Comparatively, 74.3% of LyondellBasell Industries NV shares are held by institutional investors. 2.3% of Innophos Holdings shares are held by insiders. Comparatively, 0.1% of LyondellBasell Industries NV shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Innophos Holdings has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, LyondellBasell Industries NV has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Innophos Holdings and LyondellBasell Industries NV, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Innophos Holdings 0 1 1 0 2.50
LyondellBasell Industries NV 1 8 6 0 2.33

Innophos Holdings currently has a consensus target price of $56.00, indicating a potential upside of 28.65%. LyondellBasell Industries NV has a consensus target price of $98.64, indicating a potential downside of 5.39%. Given Innophos Holdings’ stronger consensus rating and higher possible upside, research analysts plainly believe Innophos Holdings is more favorable than LyondellBasell Industries NV.

Profitability

This table compares Innophos Holdings and LyondellBasell Industries NV’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Innophos Holdings 6.19% 13.90% 7.26%
LyondellBasell Industries NV 11.32% 58.13% 16.10%

Summary

LyondellBasell Industries NV beats Innophos Holdings on 10 of the 17 factors compared between the two stocks.

Innophos Holdings Company Profile

Innophos Holdings, Inc. is a producer of nutritional specialty ingredients with applications in food, beverage, dietary supplements, pharmaceutical, oral care and industrial end markets. The Company also provides bioactive mineral and nutritional ingredients. The Company’s segments include Specialty Phosphates US & Canada, Specialty Phosphates Mexico, and Granular Triple Super Phosphate (GTSP) & Other. The Company has four principal product lines: Specialty Ingredients; Food and Technical Grade Purified Phosphoric Acid (PPA); Technical Grade Sodium Tripolyphosphate (STPP), & Detergent Grade PPA, and GTSP & Other. The Company’s bioactive mineral ingredients are mineral-based ingredients for food, beverage and dietary supplement end markets that are manufactured to be readily digestible. The Company has its manufacturing facilities located throughout the United States, Canada, Mexico and China.

LyondellBasell Industries NV Company Profile

LyondellBasell Industries N.V. is a chemical company. The Company operates in five segments: Olefins and Polyolefins-Americas (O&P-Americas), Olefins and Polyolefins-Europe, Asia, International (O&P-EAI), Intermediates and Derivatives (I&D), Refining and Technology. The O&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene. The O&P-EAI segment produces and markets olefins and co-products, polyethylene and polypropylene. The I&D segment produces and markets propylene oxide (PO) and its derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer (SM), acetyls and ethylene oxides. The primary product of the Refining segment is refined products made from sulfur crude oil and other crude oils of various types and sources available on the United States Gulf Coast. The Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.

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