Critical Analysis: Koppers (NYSE:KOP) & Akzo Nobel (OTCMKTS:AKZOY)

Koppers (NYSE:KOP) and Akzo Nobel (OTCMKTS:AKZOY) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, valuation, risk and earnings.

Valuation and Earnings

This table compares Koppers and Akzo Nobel”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koppers	$1.88 billion	0.38	$56.00 million	$2.77	13.50
Akzo Nobel	$11.49 billion	0.90	$718.44 million	$1.41	14.35

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

Dividends

Koppers pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. Akzo Nobel pays an annual dividend of $0.25 per share and has a dividend yield of 1.2%. Koppers pays out 13.0% of its earnings in the form of a dividend. Akzo Nobel pays out 17.7% 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.

Insider & Institutional Ownership

92.8% of Koppers shares are owned by institutional investors. Comparatively, 0.4% of Akzo Nobel shares are owned by institutional investors. 7.3% of Koppers shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Koppers	2.98%	15.47%	4.37%
Akzo Nobel	6.49%	13.73%	4.39%

Analyst Ratings

This is a breakdown of current ratings and target prices for Koppers and Akzo Nobel, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koppers	0	2	2	0	2.50
Akzo Nobel	0	6	0	1	2.29

Koppers currently has a consensus target price of $52.50, suggesting a potential upside of 40.44%. Given Koppers’ stronger consensus rating and higher probable upside, analysts plainly believe Koppers is more favorable than Akzo Nobel.

Volatility & Risk

Koppers has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Akzo Nobel has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Summary

Koppers beats Akzo Nobel 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 Akzo Nobel

Akzo Nobel N.V. engages in the production and sale of paints and coatings worldwide. The company operates through two segments: Decorative Paints and Performance Coatings. It offers decorative paints, including paints, lacquers, and varnishes; and a range of mixing machines and color concepts for the building and renovation industry, as well as specialty coatings. The company also provides performance coatings that protect and enhance ships, cars, aircraft, yachts, architectural components, consumer goods, and oil and gas facilities. It offers its products under AkzoNobel, Alabastine, Alba, Andercol, Apla, Armstead Trade, Astral, Astral Batiment, AwlGrip, Brikol, Dulux, Bruguer, Cetabever, Cetol, Chemcraft, Colourland Paints, CONSOLAN, Coral, Cromadex, Cuprinol, Dynacoat, Flexa, Glitsa, Grip-Gard, Herbol, Hammerite, International, Interlux, Innenweis, Interpon, Inca, Luxol, Levis, Lesonal, Molto, Modern Classikk, Maxilite, Mauvilac, Mason CT, Marshall, Mactra, Nordsjo, Oxirite, Protecto, Procolor, Polyfilla, Polycell, Pinotex, Pintuco, Resicoat, Relest, Sparlack, Sadolin, Sikkens, Sea Hawk, Savana, Salcomix, Trimetal, Titanlux, Taubmans, U-tech, Vpowdertech, Vivechrom, Xylazel, Xyladecor, Wanda, and Zweihorn brands. The company serves to energy, packaging, infrastructure, and shipbuilding and maintenance industries, as well as general industries, such as agricultural and construction equipment, construction-related steel, metal fabrication, pipes, appliances, and transportation. The company was formerly known as Akzo NV and changed its name to Akzo Nobel N.V. in 1994. Akzo Nobel N.V. was founded in 1646 and is headquartered in Amsterdam, the Netherlands.