Critical Survey: Nissan Chemical (OTCMKTS:NNCHY) & RPM International (NYSE:RPM)

RPM International (NYSE:RPM) and Nissan Chemical (OTCMKTS:NNCHY) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, profitability and risk.

Risk and Volatility

RPM International has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Nissan Chemical has a beta of 0.01, meaning that its stock price is 99% less volatile than the S&P 500.

Dividends

RPM International pays an annual dividend of $2.04 per share and has a dividend yield of 1.9%. Nissan Chemical pays an annual dividend of $0.32 per share and has a dividend yield of 1.0%. RPM International pays out 40.9% of its earnings in the form of a dividend. Nissan Chemical 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. RPM International has raised its dividend for 51 consecutive years. RPM International 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 for RPM International and Nissan Chemical, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RPM International	0	6	6	1	2.62
Nissan Chemical	0	0	0	0	0.00

RPM International presently has a consensus target price of $124.55, indicating a potential upside of 16.49%. Given RPM International’s stronger consensus rating and higher possible upside, research analysts plainly believe RPM International is more favorable than Nissan Chemical.

Insider and Institutional Ownership

81.0% of RPM International shares are owned by institutional investors. 1.6% of RPM International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares RPM International and Nissan Chemical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RPM International	8.82%	25.08%	9.98%
Nissan Chemical	17.10%	17.98%	12.71%

Valuation & Earnings

This table compares RPM International and Nissan Chemical”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RPM International	$7.34 billion	1.87	$588.40 million	$4.99	21.43
Nissan Chemical	$1.65 billion	2.59	$284.08 million	$2.06	15.19

RPM International has higher revenue and earnings than Nissan Chemical. Nissan Chemical is trading at a lower price-to-earnings ratio than RPM International, indicating that it is currently the more affordable of the two stocks.

Summary

RPM International beats Nissan Chemical on 14 of the 18 factors compared between the two stocks.

About RPM International

RPM International Inc. manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. It offers waterproofing, coating, and traditional roofing systems; sealants, air barriers, tapes, and foams; residential home weatherization systems; roofing and building maintenance services; sealing and bonding, subfloor preparation, flooring, and glazing solutions; resin flooring systems, polyurethane, MMA waterproof, epoxy floor paint and coatings, concrete repair, and protection products; fire stopping and intumescent steel coating, and manufacturing industry solutions; rolled asphalt roofing materials and chemical admixtures; concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps, and restoration materials; insulated building cladding materials; and concrete form wall systems. It also provides polymer flooring systems; fiberglass reinforced plastic gratings and shapes; corrosion-control coating, containment and railcar lining, fire and sound proofing, and heat and cryogenic insulation products; specialty construction products; amine curing agents, reactive diluents, and epoxy resins; fluorescent colorants and pigments; shellac-based-specialty and marine coatings; fire and water damage restoration, carpet cleaning, and disinfecting products; fuel additives; wood treatments, coatings, and touch-up products; and nail enamels, polishes, and coating components. In addition, it offers solutions for the paint contractors and DIYers, concrete restoration and flooring, metallic and faux finish coatings, cleaners, and hobby paints and cements; and caulks, adhesives, insulating foams, and patches, as well as spackling, glazing, and repair products. The company was incorporated in 1947 and is headquartered in Medina, Ohio.

About Nissan Chemical

Nissan Chemical Corporation engages in the chemicals, performance materials, agricultural chemicals, and pharmaceuticals businesses in Japan and internationally. The company provides high purity chemicals; AdBlue, an urea solution; ammonia, sulfuric, and nitric acid, as well as concrete and civil engineering-related products; TEPIC, an epoxy compound; Melamine Cyanurate, a salt of melamine and iso cyanuric acid; TEPIC-VL, a liquid epoxy compound; TEPIC-FL, a liquid epoxy material; FOLDI-E101, an epoxy reactive diluent; Ecopromote, a nucleating agents for PLA; Nissan Reishi, a health food; phenylphosphonic acid; HI-LITE, a chlorinated isocyanulate; OPTBEADS, a melamine-formaldehyde resin and silica; and FINEOXOCOL, a saturated fatty alcohol and acid. It also offers performance materials comprising display, semiconductor, and inorganic materials; agricultural chemicals, such as herbicides, insecticides, fungicides, etc. for use on agricultural land, as well as in golf courses and parks; and drug substances for antiparasite drugs for animals. In addition, the company provides pharmaceutical products, such as LIVALO, a antihypercholesterolemic agent; LANDEL and FINTE, a long-acting calcium channel blocker; APIs and intermediaries; and manufacturing and process researching services for pharmaceutical ingredients. Further, it develops healthcare, information and communication materials, and environmental and energy materials. The company was formerly known as Nissan Chemical Industries, Ltd. and changed its name to Nissan Chemical Corporation in July 2018. Nissan Chemical Corporation was founded in 1887 and is headquartered in Tokyo, Japan.