Critical Review: Neo Performance Materials (OTCMKTS:NOPMF) and UBE (OTCMKTS:UBEOF)

UBE (OTCMKTS:UBEOF) and Neo Performance Materials (OTCMKTS:NOPMF) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Dividends

UBE pays an annual dividend of $3.98 per share and has a dividend yield of 26.1%. Neo Performance Materials pays an annual dividend of $0.29 per share and has a dividend yield of 1.0%. UBE pays out 70.3% of its earnings in the form of a dividend. Neo Performance Materials pays out -111.5% 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.

Valuation & Earnings

This table compares UBE and Neo Performance Materials”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
UBE	N/A	N/A	N/A	$5.67	2.70
Neo Performance Materials	$478.79 million	2.67	-$9.98 million	($0.26)	-107.17

UBE has higher earnings, but lower revenue than Neo Performance Materials. Neo Performance Materials is trading at a lower price-to-earnings ratio than UBE, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares UBE and Neo Performance Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
UBE	N/A	N/A	N/A
Neo Performance Materials	-1.98%	8.03%	4.64%

Institutional & Insider Ownership

16.0% of UBE shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for UBE and Neo Performance Materials, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
UBE	0	0	0	0	0.00
Neo Performance Materials	0	0	1	1	3.50

Summary

Neo Performance Materials beats UBE on 7 of the 12 factors compared between the two stocks.

About UBE

UBE Corporation, together with its subsidiaries, engages in the chemicals, construction materials, and machinery businesses in Japan, North America, Europe, Africa, the Middle East, Thailand, India, Latin America, and internationally. It offers synthetic rubber, engineering plastics, caprolactam, industrial chemicals, liquefied gas, polyethylene, ammonium sulfate, polyimide, battery materials, separation membranes, fine chemicals, ceramics, high purity chemicals, semiconductor gas products, and products for polyurethane resins. The company also provides contract manufacturing services for APIs and intermediates; aromatic SF5 compounds; FLUOLEAD, a novel nucleophilic fluorinating agent; and drug discovery and pipeline services. In addition, it offers cement products, ready mixed concrete, soil stabilizing cement, building materials, limestone, calcia and magnesia, specialty inorganic materials, and resource recycling, as well as sells coal. Further, the company is involved in the supply of electric power. Additionally, it provides die-casting and injection molding machines, and extrusion presses; and UBE vertical mills, kilins, furnaces, dryers, water screening equipment, storage and transportation systems, bridges and steel structures, and steel billets and casting. The company also manufactures and sells nylon, caprolactam, ammonium sulfate, plastic films, polypropylene molded products, fibers, fiber-reinforced plastics, and cast iron and steel products. The company was formerly known as Ube Industries, Ltd. UBE Corporation was founded in 1897 and is headquartered in Tokyo, Japan.

About Neo Performance Materials

Neo Performance Materials Inc. engages in the manufacture and sale of rare earth, magnetic powders, magnets, and rare metal-based functional materials in Canada and internationally. The company operates in three segments: Magnequench, Chemicals and Oxides, and Rare Metals. The Magnequench segment produces magnetic powders that are used in bonded and hot deformed fully dense neodymium-iron-boron magnets; and bonded magnets. Its powders are used in the production of bonded permanent magnets that are components in automotive motors, pumps, micro motors, traction motors, sensors, and other applications. The Chemicals and Oxides segments manufactures and distributes a range of industrial materials for use in auto catalysts, consumer electronics, petroleum refining, hybrid and electric vehicles, and municipal and industrial wastewater treatment applications. The Rare Metals segment sources, produces, reclaims, refines, and markets high-temperature metals that include tantalum, niobium, hafnium, and rhenium; and electronic metals, such as gallium and indium for jet engines, medical imaging, wireless technologies, and LED lightings, as well as flat panel displays, solar, steel additives, batteries, and electronic applications. The company was founded in 1994 and is headquartered in Toronto, Canada.