Critical Analysis: A Schulman (SHLM) & DowDuPont (DWDP)
A Schulman (NASDAQ: SHLM) and DowDuPont (NYSE:DWDP) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.
Risk and Volatility
A Schulman has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, DowDuPont has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.
This table compares A Schulman and DowDuPont’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares A Schulman and DowDuPont’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|A Schulman||$2.46 billion||0.53||$33.02 million||$1.75||25.37|
|DowDuPont||$62.48 billion||2.46||$1.46 billion||$3.40||19.39|
DowDuPont has higher revenue and earnings than A Schulman. DowDuPont is trading at a lower price-to-earnings ratio than A Schulman, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
87.6% of A Schulman shares are owned by institutional investors. Comparatively, 69.3% of DowDuPont shares are owned by institutional investors. 4.1% of A Schulman shares are owned by insiders. Comparatively, 0.4% of DowDuPont shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
A Schulman pays an annual dividend of $0.82 per share and has a dividend yield of 1.8%. DowDuPont pays an annual dividend of $1.52 per share and has a dividend yield of 2.3%. A Schulman pays out 46.9% of its earnings in the form of a dividend. DowDuPont pays out 44.7% 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. DowDuPont is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of current recommendations for A Schulman and DowDuPont, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
A Schulman currently has a consensus price target of $37.00, suggesting a potential downside of 16.67%. DowDuPont has a consensus price target of $80.95, suggesting a potential upside of 22.79%. Given DowDuPont’s stronger consensus rating and higher probable upside, analysts clearly believe DowDuPont is more favorable than A Schulman.
DowDuPont beats A Schulman on 11 of the 16 factors compared between the two stocks.
A Schulman Company Profile
A. Schulman, Inc. manufactures and supplies plastic compounds and resins. It offers custom performance colors, including standard and customized colors, organic and inorganic pigments, high chroma colors in translucent or opaque formats, and special effects. The company also provides engineered composites, such as bulk molding compounds, sheet molding compounds, and thick molding compounds, as well as high performance engineered structural composite solutions for original equipment manufacturers and custom molders. In addition, it offers concentrates to enhance the performance, appearance, and processing of plastics for intended applications; additive solutions; and application solutions that minimize the use of plastics, or incorporate the use of recycled plastics or renewable-based polymers, as well as provides films for agriculture, packaging, and personal care and hygiene applications. Further, the company offers polymer solutions, which provide structural integrity; multi-component blends that include polyolefins, nylons, polyesters and elastomers, and others; and formulating know-how with fiber reinforcements, such as glass and carbon, nano-reinforcements, flame retardants, impact modifiers, and UV stabilization. Additionally, it offers size reduction services; specialty powders for rotational molding, oil and gas additives, and sports and leisure products; jet milling services used for products requiring fine particle size; and cryogenic milling services. The company also buys, repackages, and resells polymers for processing types, such as injection molding, blow molding, thermoforming, and film and sheet extruding. It serves packaging, mobility, building and construction, electronics and electrical, agriculture, personal care and hygiene, custom services, sports, home, and leisure markets in Europe, the Middle East, Africa, the United States, Canada, Latin America, and the Asia Pacific. The company was founded in 1928 and is headquartered in Fairlawn, Ohio.
DowDuPont Company Profile
DowDuPont Inc., through its subsidiaries, engages in agriculture, materials science, and specialty products businesses worldwide. The company’s Agriculture segment develops and sells hybrid corn seed and soybean seed varieties; canola, cotton, sunflower, sorghum, wheat, and rice seeds; silage inoculants; and weed control, disease control, and insect control products. Its Performance Materials & Coatings segment manufactures and sells architectural paints and coatings, and industrial coatings; performance monomers and silicones; and standalone silicone and acrylic-based materials. The company’s Industrial Intermediates & Infrastructure segment offers cellulose ethers, redispersible latex powders, silicones, and acrylic emulsions; energy solutions; propylene oxide and propylene glycol, polyether polyols and aromatic isocyanates, and formulated polyurethane systems; and caustic soda, and ethylene dichloride and vinyl chloride monomer products. Its Packaging & Specialty Plastics segment provides ethylene, and propylene and aromatic products; and polyolefin elastomers and ethylene propylene diene monomer elastomers. The company’s Electronics & Imaging segment offers materials and systems for mobile devices, television monitors, personal computers, and electronics. Its Nutrition & Biosciences segment provides specialty food ingredients, as well as cellulosic- and alginates-based pharma excipients; and enzymes, biomaterials, biocides, and antimicrobial solutions and process technology. The company’s Transportation & Advanced Polymers segment offers engineering resins, adhesives, lubricants, and parts for transportation, electronics, medical, industrial, and consumer end-markets. Its Safety & Construction segment provides engineered products and integrated systems for construction, worker safety, energy, oil and gas, transportation, medical device, and water purification and separation industries. The company was founded in 1897 and is headquartered in Midland, Michigan.
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