Financial Analysis: Brenntag (OTCMKTS:BNTGY) versus Northern Technologies International (NASDAQ:NTIC)

Northern Technologies International (NASDAQ:NTIC) and Brenntag (OTCMKTS:BNTGY) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.

Risk & Volatility

Northern Technologies International has a beta of 0.18, suggesting that its share price is 82% less volatile than the S&P 500. Comparatively, Brenntag has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.

Earnings and Valuation

This table compares Northern Technologies International and Brenntag”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northern Technologies International	$84.24 million	0.98	$20,000.00	($0.04)	-217.00
Brenntag	$17.16 billion	0.47	$580.22 million	$0.64	17.38

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

Dividends

Northern Technologies International pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Brenntag pays an annual dividend of $0.28 per share and has a dividend yield of 2.5%. Northern Technologies International pays out -100.0% of its earnings in the form of a dividend. Brenntag pays out 43.8% 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.

Profitability

This table compares Northern Technologies International and Brenntag’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northern Technologies International	-0.35%	-0.44%	-0.34%
Brenntag	1.71%	5.88%	2.37%

Analyst Ratings

This is a breakdown of current ratings for Northern Technologies International and Brenntag, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northern Technologies International	1	1	0	0	1.50
Brenntag	3	6	0	0	1.67

Brenntag has a consensus price target of $12.80, indicating a potential upside of 15.11%. Given Brenntag’s stronger consensus rating and higher probable upside, analysts clearly believe Brenntag is more favorable than Northern Technologies International.

Insider and Institutional Ownership

32.9% of Northern Technologies International shares are owned by institutional investors. 24.9% of Northern Technologies International shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Brenntag beats Northern Technologies International on 11 of the 15 factors compared between the two stocks.

About Northern Technologies International

Northern Technologies International Corporation develops and markets rust and corrosion inhibiting solutions in North America, South America, Europe, Asia, the Middle East and internationally. It offers rust and corrosion inhibiting products, such as plastic and paper packaging, liquids, coatings, rust removers, cleaners, diffusers, and engineered solutions designed for the oil and gas industry under the ZERUST brand. The company provides a portfolio of bio-based and certified compostable polymer resin compounds and finished products under the Natur-Tec brand. In addition, it offers on-site and technical consulting for rust and corrosion prevention issues. It sells its products and services to automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets through direct sales force, network of independent distributors, agents, manufacturer's sales representatives, and strategic partners. The company was founded in 1970 and is headquartered in Circle Pines, Minnesota.

About Brenntag

Brenntag SE purchases and supplies various industrial and specialty chemicals, and ingredients in Germany, Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates in two segments, Brenntag Essentials and Brenntag Specialties. It provides just-in-time delivery, product mixing, blending, repackaging, inventory management, and drum return handling. The company serves customers in various end-market industries, including nutrition, pharma, personal care, water treatment, and lubricants; and home, industrial, and institutional markets, as well as coatings and constructions, polymers, and rubber industries. The company was founded in 1874 and is based in Essen, Germany.