Contrasting Versum Materials (VSM) and OM Group (OMG)

Versum Materials (NYSE: VSM) and OM Group (NYSE:OMG) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Versum Materials and OM Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Versum Materials 0 2 5 0 2.71
OM Group 0 0 0 0 N/A

Versum Materials currently has a consensus target price of $37.00, indicating a potential upside of 1.40%.

Profitability

This table compares Versum Materials and OM Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Versum Materials 13.55% 6,666.66% 17.66%
OM Group 3.68% 4.22% 2.58%

Earnings & Valuation

This table compares Versum Materials and OM Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Versum Materials $1.13 billion 3.53 $193.00 million $1.81 20.16
OM Group N/A N/A N/A ($6.13) N/A

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

Insider and Institutional Ownership

91.1% of Versum Materials shares are owned by institutional investors. 0.5% of Versum Materials shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. OM Group does not pay a dividend. Versum Materials pays out 11.0% of its earnings in the form of a dividend.

Summary

Versum Materials beats OM Group on 9 of the 10 factors compared between the two stocks.

About Versum Materials

Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.

About OM Group

OM Group, Inc. is a United States-based industrial company. The Company is engaged in serving global markets, including automotive systems, electronic devices, aerospace and defense, industrial and medical. It operates in three business segments: Magnetic Technologies, Battery Technologies and Specialty Chemicals. Its Magnetic Technologies segment develops, manufactures and distributes industrial-use magnetic materials and related products to an array of end markets, including automotive systems, electrical installation technology, industrial, retail and renewable energy. The Company’s Battery Technologies segment provides batteries, battery management systems, and energetic devices for defense, space and medical markets. The Company’s Specialty Chemicals segment develops, produces and supplies chemicals for electronic applications, industrial applications including coatings, composites and tire, and photomasks used by customers to produce semiconductors and related products.

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