Financial Comparison: Verenium (VRNM) and Olin (OLN)

Olin (NYSE: OLN) and Verenium (NASDAQ:VRNM) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Olin and Verenium, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Olin 0 0 9 0 3.00
Verenium 0 0 0 0 N/A

Olin currently has a consensus target price of $40.88, indicating a potential upside of 24.92%. Given Olin’s higher possible upside, equities analysts plainly believe Olin is more favorable than Verenium.

Insider & Institutional Ownership

90.1% of Olin shares are owned by institutional investors. 2.9% of Olin shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

Olin has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500. Comparatively, Verenium has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Dividends

Olin pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. Verenium does not pay a dividend. Olin pays out 24.7% of its earnings in the form of a dividend.

Profitability

This table compares Olin and Verenium’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Olin 8.77% 6.02% 1.59%
Verenium N/A N/A N/A

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Olin $6.27 billion 0.87 $549.50 million $3.24 10.10
Verenium N/A N/A N/A ($1.56) -2.56

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

Summary

Olin beats Verenium on 12 of the 13 factors compared between the two stocks.

About Olin

Olin Corporation is a manufacturer and distributor of chemical products, and ammunition. The Company operates through three segments: Chlor Alkali Products and Vinyls, Epoxy and Winchester. The Chlor Alkali Products and Vinyls segment manufactures and sells chlorine and caustic soda, ethylene dichloride and vinyl chloride monomer, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, trichloroethylene and vinylidene chloride, hydrochloric acid, hydrogen, bleach products and potassium hydroxide. The Epoxy segment produces and sells a range of epoxy materials, including allyl chloride, epichlorohydrin, liquid epoxy resins and downstream products, such as converted epoxy resins and additives. The Winchester segment produces and sells sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges.

About Verenium

Verenium Corporation (Verenium) is an industrial biotechnology company. The Company develops and commercializes enzymes for use in a range of industrial processes. It manufactures and markets its enzyme products in the fields of animal health and nutrition, grain processing, oilfield services and other industrial processes, such as pulp and paper and textiles. As of December 31, 2012, it marketed commercial enzyme products, either independently or in collaboration with its partners. In addition, it has developed a pipeline of enzyme product candidates. Its products are organized into four product lines: animal health and nutrition, grain processing, oilfield services and other industrial processes. As of December 31, 2012, it markets nine commercial enzyme products. In October 2013, BASF SE acquired 71% stake in the Company.

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