Quaker Houghton (NYSE:KWR) and FUCHS (OTCMKTS:FUPBY) Critical Review

Quaker Houghton (NYSE:KWR) and FUCHS (OTCMKTS:FUPBY) are both mid-cap basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Risk & Volatility

Quaker Houghton has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, FUCHS has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Dividends

Quaker Houghton pays an annual dividend of $1.94 per share and has a dividend yield of 1.3%. FUCHS pays an annual dividend of $0.17 per share and has a dividend yield of 1.4%. Quaker Houghton pays out -451.2% of its earnings in the form of a dividend. FUCHS pays out 27.9% 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. Quaker Houghton has increased its dividend for 17 consecutive years.

Analyst Ratings

This is a summary of recent recommendations and price targets for Quaker Houghton and FUCHS, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quaker Houghton	0	1	3	0	2.75
FUCHS	1	0	0	0	1.00

Quaker Houghton presently has a consensus price target of $150.75, indicating a potential upside of 4.70%. Given Quaker Houghton’s stronger consensus rating and higher possible upside, equities analysts clearly believe Quaker Houghton is more favorable than FUCHS.

Insider and Institutional Ownership

77.5% of Quaker Houghton shares are held by institutional investors. 1.1% of Quaker Houghton shares are held by 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 Quaker Houghton and FUCHS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quaker Houghton	-0.39%	8.35%	4.25%
FUCHS	8.16%	15.56%	11.09%

Valuation and Earnings

This table compares Quaker Houghton and FUCHS”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quaker Houghton	$1.84 billion	1.36	$116.64 million	($0.43)	-334.86
FUCHS	$3.81 billion	1.71	$326.79 million	$0.61	19.22

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

Summary

FUCHS beats Quaker Houghton on 9 of the 17 factors compared between the two stocks.

About Quaker Houghton

Quaker Chemical Corporation, together with its subsidiaries, develops, produces, and markets various formulated specialty chemical products for a range of heavy industrial and manufacturing applications in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die-cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids, and surface treatment chemicals. The company also provides chemical management services. It serves steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies. The company was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.

About FUCHS

Fuchs SE develops, produces, and sells lubricants and related specialties in Europe, the Middle East, Africa, the Asia Pacific, and North and South America. The company offers automotive lubricants, such as biodegradable lubricants, central and mobile hydraulic oils, dry coatings, engine and gear oils, motorcycle/two wheelers, and service fluids, as well as various oils for agriculture sector. It also provides industrial lubricants, including chain lubricants, dry coatings, gear and hydraulic oils, machine oils, open gear lubricants, rapidly biodegradable lubricants, compressor and refrigeration oils, release agents, slideways oils, fluids and industrial oils, textile machine oils, and turbine oils. In addition, the company offers lubricating greases comprising assembly pastes, biodegradable greases, food grade greases, multi-purpose/long-life greases, pastes for extreme temperatures, perfluorinated pastes, and wheel bearing greases, as well as gear boxes, and greases for central lubricating system, extreme temperature, machine tools, plain and roller bearings, rail vehicles, spray cans or rattle cans, and solid lubricants. Further, it provides metal processing lubricants consisting of cleaners, corrosion preventives, cutting and grinding, forming lubricants, and quenching oils; and special application lubricants for application equipment, chain lubrication, dry coatings, food and beverage, gears, sugar processing, railway traffic, plain and roller bearings, glass manufacturing process, hot forming, maintenance, open gears, pastes, release agents, other specialties, special greases, and wind power plants. Additionally, the company offers open gear and surface coating services. The company was formerly known as Fuchs Petrolub SE and changed its name to Fuchs SE in July 2023. Fuchs SE was founded in 1931 and is headquartered in Mannheim, Germany.