Critical Comparison: Chemtura (CHMT) versus Valvoline (VVV)

Valvoline (NYSE: VVV) and Chemtura (NYSE:CHMT) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Analyst Ratings

This is a summary of recent recommendations for Valvoline and Chemtura, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valvoline 0 5 2 0 2.29
Chemtura 0 0 0 0 N/A

Valvoline currently has a consensus target price of $25.71, suggesting a potential upside of 2.90%. Given Valvoline’s higher probable upside, equities research analysts clearly believe Valvoline is more favorable than Chemtura.

Profitability

This table compares Valvoline and Chemtura’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valvoline 14.59% -137.91% 14.86%
Chemtura 5.71% 9.00% 4.02%

Institutional & Insider Ownership

92.5% of Valvoline shares are held by institutional investors. Comparatively, 93.1% of Chemtura shares are held by institutional investors. 0.1% of Valvoline shares are held by company insiders. Comparatively, 2.6% of Chemtura shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Valvoline pays an annual dividend of $0.30 per share and has a dividend yield of 1.2%. Chemtura does not pay a dividend. Valvoline pays out 20.1% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Valvoline and Chemtura’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Valvoline $2.08 billion 2.42 $304.00 million $1.49 16.77
Chemtura N/A N/A N/A ($0.19) -176.32

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

Summary

Valvoline beats Chemtura on 8 of the 12 factors compared between the two stocks.

Valvoline Company Profile

Valvoline Inc. (Valvoline) is engaged in the production and distribution of automotive, commercial and industrial lubricants, and automotive chemicals. The Company operates through three segments: Core North America, Quick Lubes and International. The Core North America segment sells Valvoline, and other branded and private label products in the United States and Canada to both consumers performing their own automotive maintenance, referred to as Do-It-Yourself (DIY) consumers, as well as, to installer customers using Valvoline products to service vehicles owned by Do-It-For-Me (DIFM) consumers. Its Quick Lubes segment services the passenger car and light truck quick lube market through platforms, including its franchised Valvoline Instant Oil Change (VIOC) stores and Express Care. Its International segment sells Valvoline and other branded products through its affiliates, joint ventures, licensees and independent distributors. Its products include All Climate, DuraBlend and MaxLife.

Chemtura Company Profile

Chemtura Corporation is a chemical company. The Company is engaged in developing, manufacturing and marketing of engineered industrial specialty chemicals. The Company’s products are sold to industrial manufacturing customers for use as additives, ingredients or intermediates. The Company’s segments are Industrial Performance Products and Industrial Engineered Products. The Industrial Performance Products segment manufactures and markets lubricant additive components, synthetic lubricant base-stocks, synthetic finished fluids, calcium sulfonate specialty greases and phosphate and polyester based fluids, and is also engaged in the development and production of hot cast elastomer pre-polymers. The Industrial Engineered Products segment develops and manufactures bromine and bromine-based products and organometallic compounds. The Company operates in a range of industries, including automotive, building and construction, electronics, lubricants, packaging and transportation.

Receive News & Ratings for Valvoline Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Valvoline and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply