Head to Head Comparison: Huntsman (NYSE:HUN) vs. Koppers (NYSE:KOP)

Koppers (NYSE:KOP) and Huntsman (NYSE:HUN) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Institutional & Insider Ownership

92.8% of Koppers shares are held by institutional investors. Comparatively, 84.8% of Huntsman shares are held by institutional investors. 6.9% of Koppers shares are held by insiders. Comparatively, 5.6% of Huntsman shares are held 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.

Risk and Volatility

Koppers has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, Huntsman has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Dividends

Koppers pays an annual dividend of $0.32 per share and has a dividend yield of 1.0%. Huntsman pays an annual dividend of $1.00 per share and has a dividend yield of 9.5%. Koppers pays out 27.6% of its earnings in the form of a dividend. Huntsman pays out -109.9% 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. Koppers has increased its dividend for 2 consecutive years and Huntsman has increased its dividend for 4 consecutive years. Huntsman is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations for Koppers and Huntsman, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koppers	0	0	1	1	3.50
Huntsman	2	7	1	0	1.90

Koppers currently has a consensus price target of $64.00, suggesting a potential upside of 95.08%. Huntsman has a consensus price target of $15.00, suggesting a potential upside of 42.11%. Given Koppers’ stronger consensus rating and higher possible upside, equities analysts clearly believe Koppers is more favorable than Huntsman.

Valuation and Earnings

This table compares Koppers and Huntsman”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koppers	$2.09 billion	0.31	$52.40 million	$1.16	28.28
Huntsman	$6.04 billion	0.30	-$189.00 million	($0.91)	-11.60

Koppers has higher earnings, but lower revenue than Huntsman. Huntsman is trading at a lower price-to-earnings ratio than Koppers, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Koppers and Huntsman’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Koppers	1.24%	17.41%	4.60%
Huntsman	-2.63%	-0.65%	-0.29%

Summary

Koppers beats Huntsman on 13 of the 17 factors compared between the two stocks.

About Koppers

Koppers Holdings Inc. provides treated wood products, wood preservation chemicals, and carbon compounds in the United States, Australasia, Europe, and internationally. The company operates through Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC), and Carbon Materials and Chemicals (CMC) segments. The RUPS segment procures and treats crossties, switch ties, and various types of lumber used for railroad bridges and crossings. It also provides rail joint bars to join rails together for railroads; transmission and distribution poles for electric and telephone utilities; and pilings. This segment provides railroad services, such as engineering, design, repair, and inspection services for railroad bridges. The PC segment develops, manufactures, and markets copper-based wood preservatives, including micronized copper azole, micronized pigments, alkaline copper quaternary, amine copper azole, and chromated copper arsenate for decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses; and supplies fire-retardant chemicals for pressure treatment of wood primarily in commercial construction. The CMC segment manufactures creosote for the treatment of wood or as a feedstock in the production of carbon black; carbon pitch, a raw material used in the production of aluminum and steel; naphthalene for use as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete; phthalic anhydride for the production of plasticizers, polyester resins, and alkyd paints; and carbon black feedstock for use in the production of carbon black. It serves the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber, and construction sectors. Koppers Holdings Inc. was founded in 1988 and is based in Pittsburgh, Pennsylvania.

About Huntsman

Huntsman Corporation manufactures and sells diversified organic chemical products worldwide. The company operates in three segments: Polyurethanes, Performance Products, and Advanced Materials. The Polyurethanes segment offers polyurethane chemicals, including methyl diphenyl diisocyanate, polyether and polyester polyols, and thermoplastic polyurethane; and aniline, benzene, nitrobenzene and other co-products. The Performance Products segment manufactures amines, such as polyetheramines, ethyleneamines, DGA Agent, JEFFCAT catalysts, and E-GRADE specialty amines and carbonates; and maleic anhydrides. The Advanced Materials segment offers epoxy, phenoxy, acrylic, polyurethane, and acrylonitrile-butadiene-based polymer formulations; and thermoset resins, curing and toughening agents, and carbon nanomaterials. The company provides pre-and post-sales technical service support to customers. Its products are used in a range of applications, including adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, insulation, packaging, coatings and construction, power generation, and refining, as well as serves the elastomers, insulation, footwear, furniture, industrial, oil and gas, liquid natural gas transport, printed circuit boards, consumer, appliances, electrical power transmission and distribution, recreational sports equipment, and medical appliances markets. The company sells its products through a network of distributors and agents. Huntsman Corporation was founded in 1970 and is headquartered in The Woodlands, Texas.