Financial Survey: Praxair (PX) versus Minerals Technologies (MTX)

Praxair (NYSE: PX) and Minerals Technologies (NYSE:MTX) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Volatility and Risk

Praxair has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500. Comparatively, Minerals Technologies has a beta of 2.27, suggesting that its share price is 127% more volatile than the S&P 500.

Profitability

This table compares Praxair and Minerals Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Praxair 11.27% 26.91% 8.73%
Minerals Technologies 11.77% 13.36% 5.57%

Dividends

Praxair pays an annual dividend of $3.30 per share and has a dividend yield of 2.1%. Minerals Technologies pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. Praxair pays out 56.4% of its earnings in the form of a dividend. Minerals Technologies pays out 4.4% 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. Praxair has raised its dividend for 13 consecutive years. Praxair is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Praxair and Minerals Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Praxair 0 4 9 0 2.69
Minerals Technologies 0 1 0 0 2.00

Praxair presently has a consensus price target of $174.45, suggesting a potential upside of 10.32%. Given Praxair’s stronger consensus rating and higher possible upside, equities analysts clearly believe Praxair is more favorable than Minerals Technologies.

Valuation and Earnings

This table compares Praxair and Minerals Technologies’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Praxair $11.44 billion 3.97 $1.25 billion $5.85 27.03
Minerals Technologies $1.68 billion 1.59 $195.10 million $4.59 16.42

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

Institutional & Insider Ownership

85.7% of Praxair shares are owned by institutional investors. Comparatively, 94.4% of Minerals Technologies shares are owned by institutional investors. 0.2% of Praxair shares are owned by insiders. Comparatively, 2.4% of Minerals Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Praxair beats Minerals Technologies on 12 of the 17 factors compared between the two stocks.

About Praxair

Praxair, Inc. produces and distributes industrial gases. It operates through five segments: North America, Europe, South America, Asia, and Surface Technologies. The company offers atmospheric gases, including oxygen, nitrogen, argon, and rare gases; and process gases, such as carbon dioxide, helium, hydrogen, electronic gases, specialty gases, and acetylene. It also supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders to the aircraft, energy, printing, primary metals, petrochemical, textile, and other industries. In addition, the company offers electric arc, plasma and wire spray, and high-velocity oxy-fuel equipment; and distributes hardgoods and welding equipment purchased from independent manufacturers. It serves various industries, such as healthcare, petroleum refining, manufacturing, food, beverage carbonation, fiber-optics, steel making, aerospace, chemicals, and water treatment. Praxair, Inc. was founded in 1907 and is headquartered in Danbury, Connecticut.

About Minerals Technologies

Minerals Technologies Inc. develops, produces, and markets various specialty mineral, mineral-based, and synthetic mineral products, and supporting systems and services worldwide. The company's Specialty Minerals segment produces and sells precipitated calcium carbonate and quicklime; and provides natural mineral products comprising limestone and talc. This segment's products are used in paper, building materials, paint and coatings, glass, ceramic, polymer, food, automotive, and pharmaceutical industries. Its Performance Materials segment supplies bentonite and bentonite-related products, as well as chromite and leonardite. This segment offers metal casting products; household, personal care, and specialty products; and basic minerals, environmental products, and building materials. In addition, this segment provides products for non-residential construction, environmental, and infrastructure projects, as well as for construction project customers. It company's Refractories segment offers monolithic and shaped refractory materials; specialty products, services, and application and measurement equipment; and calcium metal and metallurgical wire products that are used in the applications of steel, non-ferrous metal, and glass industries. Its Energy Services segment provides offshore filtration and well testing services to the oil and gas industry. The company markets its products primarily through its direct sales force, as well as regional distributors. Minerals Technologies Inc. was founded in 1968 and is headquartered in New York City, New York.

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