Materion (MTRN) & Park-Ohio (PKOH) Critical Comparison

Materion (NYSE: MTRN) and Park-Ohio (NASDAQ:PKOH) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Risk & Volatility

Materion has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500. Comparatively, Park-Ohio has a beta of 2.79, meaning that its stock price is 179% more volatile than the S&P 500.

Institutional & Insider Ownership

92.2% of Materion shares are owned by institutional investors. Comparatively, 55.3% of Park-Ohio shares are owned by institutional investors. 2.9% of Materion shares are owned by insiders. Comparatively, 31.2% of Park-Ohio shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Materion pays an annual dividend of $0.40 per share and has a dividend yield of 0.7%. Park-Ohio pays an annual dividend of $0.50 per share and has a dividend yield of 1.3%. Materion pays out 23.3% of its earnings in the form of a dividend. Park-Ohio pays out 15.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Materion has increased its dividend for 5 consecutive years. Park-Ohio is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and price targets for Materion and Park-Ohio, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Materion 0 2 0 0 2.00
Park-Ohio 0 2 0 0 2.00

Materion presently has a consensus price target of $48.00, suggesting a potential downside of 11.93%. Park-Ohio has a consensus price target of $37.00, suggesting a potential downside of 4.76%. Given Park-Ohio’s higher possible upside, analysts clearly believe Park-Ohio is more favorable than Materion.

Valuation and Earnings

This table compares Materion and Park-Ohio’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Materion $1.14 billion 0.96 $11.45 million $1.72 31.69
Park-Ohio $1.41 billion 0.35 $28.60 million $3.23 12.03

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

Profitability

This table compares Materion and Park-Ohio’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Materion 1.00% 6.95% 4.45%
Park-Ohio 2.02% 15.04% 3.74%

Summary

Park-Ohio beats Materion on 10 of the 15 factors compared between the two stocks.

Materion Company Profile

Materion Corporation, through its subsidiaries, is an integrated producer of engineered materials used in a range of electrical, electronic, thermal, and structural applications. The Company operates in four segments: Performance Alloys and Composites, Advanced Materials, Precision Coatings, and Other. The Performance Alloys and Composites segment consists of businesses, such as Performance Metals and Technical Materials. The Advanced Materials segment produces chemicals, microelectronics packaging, precious metal, non-precious metal and specialty metal products. The Precision Coatings segment includes units, such as Precision Optics and Large Area Coatings. Its products include inorganic chemicals and powders, specialty coatings, specialty engineered beryllium and copper-based alloys, beryllium composites, ceramics and engineered clad, and plated metal systems.

Park-Ohio Company Profile

Park-Ohio Holdings Corp., through its subsidiaries, provides supply chain management outsourcing services, capital equipment, and manufactured components in the United States, Asia, Europe, Canada, Mexico, and internationally. The company's Supply Technologies segment offers Total Supply Management solution, including engineering and design support, part usage and cost analysis, supplier selection, quality assurance, bar coding, product packaging and tracking, just-in-time and point-of-use delivery, electronic billing, and ongoing technical support services, as well as provides spare parts and aftermarket products; and production components, including valves, fuel hose assemblies, electro-mechanical hardware, labels, fittings, steering components, and other products. This segment also engineers and manufactures precision cold formed and cold extruded fasteners and other products, including locknuts, SPAC nuts, and wheel hardware. The company's Assembly Components segment manufactures aluminum products, high pressure direct fuel injection fuel rails and pipes, and fuel filler pipes, as well as flexible multi-layer plastic and rubber assemblies; and turbo charging hoses and turbo coolant hoses. This segment also offers machining services, as well as value-added services, such as design engineering, machining, and part assembly; and supplies aluminum components. The company's Engineered Products segment designs and manufactures engineered products, including induction heating and melting systems, pipe threading systems, and forged and machined products primarily for ferrous and non-ferrous metals, silicon, coatings, forging, foundry, automotive, and construction equipment industries; engineers and installs mechanical forging presses; sells spare parts; provides field services; and offers aerospace and defense structural components, and railcar center plates and draft lugs. The company was founded in 1961 and is headquartered in Cleveland, Ohio.

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