Critical Review: Ashland (ASH) and Balchem (BCPC)

Ashland (NYSE: ASH) and Balchem (NASDAQ:BCPC) are both mid-cap basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Ashland and Balchem, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ashland 0 2 9 0 2.82
Balchem 0 2 0 0 2.00

Ashland currently has a consensus target price of $85.56, indicating a potential upside of 10.04%. Balchem has a consensus target price of $85.00, indicating a potential downside of 9.78%. Given Ashland’s stronger consensus rating and higher possible upside, research analysts plainly believe Ashland is more favorable than Balchem.

Dividends

Ashland pays an annual dividend of $0.90 per share and has a dividend yield of 1.2%. Balchem pays an annual dividend of $0.42 per share and has a dividend yield of 0.4%. Ashland pays out 36.9% of its earnings in the form of a dividend.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ashland $3.26 billion 1.49 $1.00 million $2.44 31.86
Balchem $594.79 million 5.09 $90.07 million N/A N/A

Balchem has lower revenue, but higher earnings than Ashland.

Risk and Volatility

Ashland has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Balchem has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Insider & Institutional Ownership

94.5% of Ashland shares are held by institutional investors. Comparatively, 87.4% of Balchem shares are held by institutional investors. 1.1% of Ashland shares are held by insiders. Comparatively, 1.0% of Balchem shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Ashland and Balchem’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ashland -0.62% 5.77% 2.31%
Balchem 15.18% 14.50% 9.03%

Summary

Ashland beats Balchem on 8 of the 15 factors compared between the two stocks.

About Ashland

Ashland Global Holdings Inc. provides specialty chemical solutions worldwide. Its Specialty Ingredients segment provides products, technologies, and resources for solving formulation and product-performance challenges. It offers solutions using natural, synthetic, and semisynthetic polymers derived from plant and seed extract, cellulose ethers, vinyl pyrrolidones, and acrylic polymers, as well as polyester and polyurethane-based adhesives. This segment offers its solutions for pharmaceutical companies; makers of personal care products, food, and beverages; manufacturers of paint, coatings, and construction materials; makers of nutraceuticals and supplements; packaging and converting markets; and oilfield service companies. The company's Composites segment manufactures and sells a range of unsaturated polyester and vinyl ester resins, gelcoats, and low-profile additives for the reinforced plastics industry; and molten maleic anhydride for the manufacture of various products, such as unsaturated polyester resins, copolymers, lubricating oil additives, alkenyl succinic anhydrides, malic acid, fumaric acid, and derivative chemicals. This segment serves manufacturers of residential and commercial building products; industrial product specifiers and manufacturers; wind blade and pipe manufacturers; automotive and truck OEM suppliers; boat builders; chemical producers; and electronics makers. Its Intermediates and Solvents segment produces 1,4 butanediol and related derivatives, including tetrahydrofuran and n-methylpyrrolidone that are used as chemical intermediates in the production of engineering polymers and polyurethanes, as well as specialty process solvents used in electronics, pharmaceuticals, water filtration membranes, and others. The company was formerly known as Ashland Inc. and changed its name to Ashland Global Holdings Inc. in September 2016. Ashland Global Holdings Inc. was founded in 1924 and is headquartered in Covington, Kentucky.

About Balchem

Balchem Corporation develops, manufactures, and markets specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, medical sterilization, and industrial markets in the United States and internationally. The company's Human Nutrition & Health segment supplies ingredients in the food and beverage industry. Its products include creamer and chocolate systems, dairy replacers, powdered fats, nutritional beverage bases, beverages, juice and dairy bases, ice cream bases and variegates, cereals, grain based snacks, and cereal based ingredients. This segment also offers microencapsulation solutions; and human grade choline nutrients and mineral amino acid chelated products for wellness applications. Its Animal Nutrition & Health segment provides microencapsulated products to enhance health and milk production in ruminant animals; chelation technology, which offers enhanced nutrient absorption for various species of production and companion animals; and choline chloride, a nutrient for monogastric animal health. The company's Specialty Products segment offers ethylene oxide primarily for use in the health care industry; and single use canisters with ethylene oxide for sterilizing re-usable devices. It also sells propylene oxide, a fumigant to aid in the control of insects and microbiological spoilage, as well as to reduce bacterial and mold contamination in shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs, and prunes; and chelated minerals for high value crops. The company's Industrial Products segment provides choline chloride derivatives for hydraulic fracturing of shale natural gas wells; and methylamines, which are building blocks for the manufacture of choline products, as well as used in industrial applications. The company sells its products through sales force, independent distributors, and sales agents. Balchem Corporation was founded in 1967 and is headquartered in New Hampton, New York.

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