Critical Review: Versum Materials (VSM) and Ener-Core (ENCR)

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

Dividends

Versum Materials pays an annual dividend of $0.32 per share and has a dividend yield of 1.0%. Ener-Core does not pay a dividend. Versum Materials pays out 13.6% of its earnings in the form of a dividend.

Volatility and Risk

Versum Materials has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500. Comparatively, Ener-Core has a beta of -0.93, meaning that its stock price is 193% less volatile than the S&P 500.

Earnings & Valuation

This table compares Versum Materials and Ener-Core’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Versum Materials $1.37 billion 2.51 $197.50 million $2.35 13.45
Ener-Core N/A N/A -$11.16 million N/A N/A

Versum Materials has higher revenue and earnings than Ener-Core.

Insider and Institutional Ownership

91.9% of Versum Materials shares are held by institutional investors. 0.5% of Versum Materials shares are held by company insiders. Comparatively, 3.8% of Ener-Core shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Versum Materials and Ener-Core’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Versum Materials 14.39% 185.48% 18.49%
Ener-Core N/A N/A -175.70%

Analyst Ratings

This is a summary of recent recommendations and price targets for Versum Materials and Ener-Core, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Versum Materials 0 1 5 0 2.83
Ener-Core 0 0 0 0 N/A

Versum Materials presently has a consensus price target of $47.00, suggesting a potential upside of 48.73%. Given Versum Materials’ higher possible upside, research analysts plainly believe Versum Materials is more favorable than Ener-Core.

Summary

Versum Materials beats Ener-Core on 10 of the 12 factors compared between the two stocks.

Versum Materials Company Profile

Versum Materials, Inc. develops, manufactures, transports, and handles specialty materials for the semiconductor and display industries in the United States, Taiwan, South Korea, China, Europe, and rest of Asia. The company operates through two segments, Materials, and Delivery Systems and Services (DS&S). The Materials segment provides specialty chemicals and materials used in semiconductors, as well as specialty gases used in the semiconductor manufacturing process, including high purity process materials for deposition, metallization, chamber cleaning, and etching; chemicals mechanical planarization slurries; organosilanes; organometallics and liquid dopants for thin film deposition; and formulated chemical products for post-etch cleaning primarily for the manufacture of silicon and compound semiconductors, and thin film transistor liquid crystal displays. The DS&S segment develops, designs, manufactures, and sells bulk gas, specialty gas, and specialty chemical cabinets and systems, which are used to manage the delivery of key materials into the semiconductor manufacturing process; and flow and temperature control systems and analytical systems to capture data. It is also involved in the project management for installation and startup of the gas and chemical delivery systems, and inventory management; and provision of spare parts, equipment upgrades, equipment maintenance, and training services. In addition, this segment offers on-site services to assist customers in managing the inventory of gases and chemicals comprising ordering, product changes and monitoring, quality assurance, operation of delivery systems, and managing the bulk gas and specialty gas operations. Versum Materials, Inc. was founded in 2015 and is headquartered in Tempe, Arizona.

Ener-Core Company Profile

Ener-Core, Inc. designs, develops, manufactures, license, and market its products that are based on Power Oxidizer technologies. The company's Power Oxidizer technology generates industrial levels of usable heat in a pressure vessel using various organic gases as fuel for an oxidation reaction. Its products include Ener-Core PowerStation EC250 and Ener-Core Powerstation KG2-3GEF/PO, which have applications in landfills, distilleries, and various industrial processes. The company sells its products directly, as well as through distributors in the United States and the Netherlands. Ener-Core, Inc. is headquartered in Irvine, California.

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