Reviewing International Flavors & Fragrances (NYSE:IFF) and AdvanSix (NYSE:ASIX)

International Flavors & Fragrances (NYSE:IFF) and AdvanSix (NYSE:ASIX) are both 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.

Profitability

This table compares International Flavors & Fragrances and AdvanSix’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Flavors & Fragrances	-3.48%	7.95%	3.97%
AdvanSix	5.10%	10.02%	4.97%

Dividends

International Flavors & Fragrances pays an annual dividend of $1.60 per share and has a dividend yield of 2.5%. AdvanSix pays an annual dividend of $0.64 per share and has a dividend yield of 3.1%. International Flavors & Fragrances pays out -103.2% of its earnings in the form of a dividend. AdvanSix pays out 22.5% 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. AdvanSix has increased its dividend for 2 consecutive years. AdvanSix is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

International Flavors & Fragrances has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, AdvanSix has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500.

Insider and Institutional Ownership

96.0% of International Flavors & Fragrances shares are held by institutional investors. Comparatively, 86.4% of AdvanSix shares are held by institutional investors. 0.2% of International Flavors & Fragrances shares are held by insiders. Comparatively, 5.6% of AdvanSix 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.

Analyst Ratings

This is a summary of recent recommendations and price targets for International Flavors & Fragrances and AdvanSix, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Flavors & Fragrances	1	3	13	0	2.71
AdvanSix	0	0	1	0	3.00

International Flavors & Fragrances presently has a consensus price target of $92.33, indicating a potential upside of 45.78%. AdvanSix has a consensus price target of $33.50, indicating a potential upside of 60.39%. Given AdvanSix’s stronger consensus rating and higher possible upside, analysts clearly believe AdvanSix is more favorable than International Flavors & Fragrances.

Earnings and Valuation

This table compares International Flavors & Fragrances and AdvanSix”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Flavors & Fragrances	$11.48 billion	1.41	$243.00 million	($1.55)	-40.86
AdvanSix	$1.52 billion	0.37	$44.15 million	$2.84	7.35

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

Summary

AdvanSix beats International Flavors & Fragrances on 11 of the 17 factors compared between the two stocks.

About International Flavors & Fragrances

International Flavors & Fragrances, Inc. engages in the manufacture and supply of flavors and fragrances used in the food, beverage, personal care, and household products industries. It operates through the following segments: Nourish, Health & Biosciences, Scent and Pharma Solutions. The Nourish segment consists of legacy Taste segment combined with N&B’s Food & Beverage division and the food protection business of N&B’s Health & Biosciences division. The Health & Biosciences business consists of a biotechnology-driven portfolio of enzymes, food cultures, probiotics and specialty ingredients for food, home and personal care, and health and wellness applications. The Scent business creates fragrance compounds, fragrance ingredients and cosmetic ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products. The Pharma Solutions business produces a vast portfolio including cellulosics and seaweed-based pharma excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling. The company was founded in 1833 and is headquartered in New York, NY.

About AdvanSix

AdvanSix Inc. engages in the manufacture and sale of polymer resins in the United States and internationally. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam to manufacture polymer resins; ammonium sulfate fertilizers to distributors, farm cooperatives, and retailers; and acetone that are used in the production of adhesives, paints, coatings, solvents, herbicides, and engineered plastic resins, as well as other intermediate chemicals, including phenol, monoisopropylamine, dipropylamine, monoallylamine, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, acetaldehyde oxime, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. The company sells its products directly, as well as through distributors. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.