Head to Head Survey: Quaker Houghton (NYSE:KWR) vs. Sensient Technologies (NYSE:SXT)

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

Profitability

This table compares Quaker Houghton and Sensient Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quaker Houghton	-0.13%	8.99%	4.42%
Sensient Technologies	8.34%	12.82%	6.78%

Analyst Ratings

This is a summary of recent ratings and price targets for Quaker Houghton and Sensient Technologies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quaker Houghton	1	1	3	0	2.40
Sensient Technologies	1	2	2	0	2.20

Quaker Houghton presently has a consensus target price of $179.50, suggesting a potential upside of 27.95%. Sensient Technologies has a consensus target price of $111.67, suggesting a potential upside of 11.09%. Given Quaker Houghton’s stronger consensus rating and higher possible upside, equities analysts clearly believe Quaker Houghton is more favorable than Sensient Technologies.

Earnings and Valuation

This table compares Quaker Houghton and Sensient Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quaker Houghton	$1.89 billion	1.29	-$2.49 million	($0.12)	-1,169.09
Sensient Technologies	$1.61 billion	2.65	$134.49 million	$3.16	31.81

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

Dividends

Quaker Houghton pays an annual dividend of $2.03 per share and has a dividend yield of 1.4%. Sensient Technologies pays an annual dividend of $1.64 per share and has a dividend yield of 1.6%. Quaker Houghton pays out -1,691.7% of its earnings in the form of a dividend. Sensient Technologies pays out 51.9% 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 raised its dividend for 17 consecutive years.

Volatility and Risk

Quaker Houghton has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500. Comparatively, Sensient Technologies has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Insider & Institutional Ownership

77.5% of Quaker Houghton shares are held by institutional investors. Comparatively, 90.9% of Sensient Technologies shares are held by institutional investors. 1.0% of Quaker Houghton shares are held by company insiders. Comparatively, 1.3% of Sensient Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Sensient Technologies beats Quaker Houghton on 10 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 Sensient Technologies

Sensient Technologies Corporation, together with its subsidiaries, develops, manufactures, and markets colors, flavors, and other specialty ingredients in North America, Europe, Asia, Australia, South America, and Africa. The company offers flavor-delivery systems, and compounded and blended products; ingredient products, such as essential oils, natural and synthetic flavors, and natural extracts; and chili powder, paprika, and chili pepper, as well as dehydrated vegetables comprising parsley, celery, and spinach to the food, beverage, and personal care industries. It also provides natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, including colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications under the Sensient Food Colors, Sensient Pharmaceutical Coating Systems, Sensient Cosmetic Technologies, and Sensient Specialty Markets trade names. Sensient Technologies Corporation was incorporated in 1882 and is headquartered in Milwaukee, Wisconsin.