Reviewing Tokuyama (OTCMKTS:TKYMY) & Koppers (NYSE:KOP)

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

Insider and Institutional Ownership

92.8% of Koppers shares are held by institutional investors. 6.9% of Koppers shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koppers	$2.09 billion	0.29	$52.40 million	$0.72	43.14
Tokuyama	$2.25 billion	0.70	$154.35 million	$0.97	11.21

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

Risk & Volatility

Koppers has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Tokuyama has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Koppers and Tokuyama, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koppers	0	0	2	1	3.33
Tokuyama	0	0	0	0	0.00

Koppers presently has a consensus target price of $52.50, suggesting a potential upside of 69.03%. Given Koppers’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Koppers is more favorable than Tokuyama.

Dividends

Koppers pays an annual dividend of $0.32 per share and has a dividend yield of 1.0%. Tokuyama pays an annual dividend of $0.23 per share and has a dividend yield of 2.1%. Koppers pays out 44.4% of its earnings in the form of a dividend. Tokuyama pays out 23.7% 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 raised its dividend for 2 consecutive years. Tokuyama is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Koppers	0.76%	17.43%	4.65%
Tokuyama	6.10%	8.31%	4.75%

Summary

Koppers beats Tokuyama on 10 of the 18 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 Tokuyama

Tokuyama Corporation produces and sells various chemical products in Japan. The company operates through six segments: Chemicals, Cement, Electronics and Advanced Materials, Life Science, Eco Business, and Others. The Chemicals segment offers caustic soda, soda ash, calcium chloride, sodium silicate cullet, sodium bicarbonate, purified, vinyl chloride monomer, polyvinyl chloride resin, propylene oxide, methylene chloride, and chloroform. The Cement segment provides cement, ready-mixed concrete, and cement-type stabilizer, as well as engages in the resource recycling business. The Electronic and Advanced Materials segment provides polycrystalline silicon; fumed silica and tetrachlorosilane; aluminum nitride; high-purity chemicals for electronics manufacturing and photoresist developer; and isopropyl alcohol. The Life Science segment provides medical diagnosis systems, dental materials and equipment, pharmaceutical ingredients and intermediates, plastic lens-related materials for glasses, and microporous film. The Eco Business segment offers plastic window sashes, ion exchange membranes, as well as engages in waste gypsum board recycling activity. The company was formerly known as Tokuyama Soda Co., Ltd. and changed its name to Tokuyama Corporation in April 1994. Tokuyama Corporation was incorporated in 1918 and is headquartered in Tokyo, Japan.