Braskem (BAK) versus Koppers (KOP) Financial Contrast

Braskem (NYSE: BAK) and Koppers (NYSE:KOP) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Risk and Volatility

Braskem has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500. Comparatively, Koppers has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500.

Profitability

This table compares Braskem and Koppers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Braskem 3.07% 28.41% 2.59%
Koppers 3.54% 119.06% 7.05%

Institutional & Insider Ownership

0.6% of Braskem shares are owned by institutional investors. Comparatively, 91.4% of Koppers shares are owned by institutional investors. 0.0% of Braskem shares are owned by company insiders. Comparatively, 3.9% of Koppers shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Braskem and Koppers’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Braskem $13.74 billion 0.82 -$117.96 million $0.90 31.42
Koppers $1.42 billion 0.60 $29.30 million $2.36 17.22

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

Analyst Ratings

This is a summary of recent recommendations for Braskem and Koppers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Braskem 0 0 1 0 3.00
Koppers 0 1 4 0 2.80

Koppers has a consensus price target of $49.60, suggesting a potential upside of 22.02%. Given Koppers’ higher probable upside, analysts clearly believe Koppers is more favorable than Braskem.

Dividends

Braskem pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. Koppers does not pay a dividend. Braskem pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Koppers beats Braskem on 10 of the 16 factors compared between the two stocks.

About Braskem

Braskem S.A. produces thermoplastic resins. The Company’s segments are Basic petrochemicals, Polyolefins, Vinyls, the United States and Europe, and Chemical distribution. It is also engaged in the import and export of chemicals, petrochemicals and fuels, the production, supply and sale of utilities such as steam, water, compressed air, industrial gases, the provision of industrial services, and the production, supply and sale of electric energy. It also invests in other companies, either as a partner or as shareholder. It operates over 40 industrial units, over 30 of which are located in the Brazilian states of Alagoas, Bahia, Rio de Janeiro, Rio Grande do Sul and Sao Paulo; over five are located in the United States, in the states of Pennsylvania, Texas and West Virginia, and over two are located in Germany, in the cities of Wesseling and Schkopau. These units produce thermoplastic resins–polyethylene, polypropylene and polyvinyl chloride, as well as basic petrochemicals.

About Koppers

Koppers Holdings Inc. is a global integrated provider of treated wood products, wood treatment chemicals and carbon compounds. The Company operates through three segments: Railroad and Utility Products and Services (RUPS), Carbon Materials and Chemicals (CMC) and Performance Chemicals (PC). The RUPS business sells treated and untreated wood products, rail joint bars and services primarily to the railroad markets. The primary products supplied by PC business are copper-based wood preservatives, including micronized copper quaternary and micronized copper azole (MicroPro), micronized pigments (MicroShades) and chromated copper arsenate. Through CMC business, the Company processes coal tar into a range of products, including carbon pitch, creosote and carbon black feedstock. Its products and services are used in a range of markets, including the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber and construction industries.

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