Brenntag (OTCMKTS:BNTGY) & Koppers (NYSE:KOP) Financial Review

Koppers (NYSE:KOP) and Brenntag (OTCMKTS:BNTGY) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Institutional & Insider Ownership

92.8% of Koppers shares are held by institutional investors. 6.9% of Koppers shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Koppers and Brenntag, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koppers	1	1	2	0	2.25
Brenntag	2	6	0	0	1.75

Koppers currently has a consensus price target of $52.50, indicating a potential upside of 92.66%. Brenntag has a consensus price target of $12.80, indicating a potential upside of 11.60%. Given Koppers’ stronger consensus rating and higher probable upside, research analysts plainly believe Koppers is more favorable than Brenntag.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Koppers	0.84%	16.48%	4.46%
Brenntag	2.66%	9.14%	3.69%

Earnings & Valuation

This table compares Koppers and Brenntag”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koppers	$2.09 billion	0.26	$52.40 million	$0.80	34.06
Brenntag	$17.57 billion	0.47	$580.22 million	$0.64	17.92

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

Dividends

Koppers pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Brenntag pays an annual dividend of $0.27 per share and has a dividend yield of 2.4%. Koppers pays out 40.0% of its earnings in the form of a dividend. Brenntag pays out 42.2% 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 increased its dividend for 2 consecutive years.

Risk & Volatility

Koppers has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, Brenntag has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Summary

Koppers beats Brenntag on 12 of the 17 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 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.