Reviewing Flexible Solutions International (NYSE:FSI) and International Flavors & Fragrances (NYSE:IFF)

International Flavors & Fragrances (NYSE:IFF) and Flexible Solutions International (NYSE:FSI) are both materials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Dividends

International Flavors & Fragrances pays an annual dividend of $1.60 per share and has a dividend yield of 1.9%. Flexible Solutions International pays an annual dividend of $0.15 per share and has a dividend yield of 2.7%. International Flavors & Fragrances pays out 146.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Flexible Solutions International pays out -62.5% of its earnings in the form of a dividend. Flexible Solutions International is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

96.0% of International Flavors & Fragrances shares are owned by institutional investors. Comparatively, 54.3% of Flexible Solutions International shares are owned by institutional investors. 1.1% of International Flavors & Fragrances shares are owned by company insiders. Comparatively, 35.8% of Flexible Solutions International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares International Flavors & Fragrances and Flexible Solutions International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Flavors & Fragrances	$10.78 billion	1.98	-$361.00 million	$1.09	76.76
Flexible Solutions International	$35.58 million	2.03	$2.78 million	($0.24)	-23.54

Flexible Solutions International has lower revenue, but higher earnings than International Flavors & Fragrances. Flexible Solutions International is trading at a lower price-to-earnings ratio than International Flavors & Fragrances, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for International Flavors & Fragrances and Flexible Solutions International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Flavors & Fragrances	1	6	12	0	2.58
Flexible Solutions International	0	1	0	1	3.00

International Flavors & Fragrances currently has a consensus price target of $91.40, indicating a potential upside of 9.24%. Given International Flavors & Fragrances’ higher possible upside, research analysts plainly believe International Flavors & Fragrances is more favorable than Flexible Solutions International.

Profitability

This table compares International Flavors & Fragrances and Flexible Solutions International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Flavors & Fragrances	2.78%	7.11%	3.96%
Flexible Solutions International	10.80%	10.61%	7.32%

Volatility and Risk

International Flavors & Fragrances has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, Flexible Solutions International has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500.

Summary

Flexible Solutions International beats International Flavors & Fragrances on 11 of the 17 factors compared between the two stocks.

About International Flavors & Fragrances

International Flavors & Fragrances, Inc. engages in the manufacture and supply of flavors and fragrances used in the food, beverage, personal care, and household products industries. It operates through the following segments: Nourish, Health & Biosciences, Scent and Pharma Solutions. The Nourish segment consists of legacy Taste segment combined with N&B’s Food & Beverage division and the food protection business of N&B’s Health & Biosciences division. The Health & Biosciences business consists of a biotechnology-driven portfolio of enzymes, food cultures, probiotics and specialty ingredients for food, home and personal care, and health and wellness applications. The Scent business creates fragrance compounds, fragrance ingredients and cosmetic ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products. The Pharma Solutions business produces a vast portfolio including cellulosics and seaweed-based pharma excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling. The company was founded in 1833 and is headquartered in New York, NY.

About Flexible Solutions International

Flexible Solutions International, Inc., together with its subsidiaries, develops, manufactures, and markets specialty chemicals that slow the evaporation of water in Canada, the United States, and internationally. The company operates in two segments, Energy and Water Conservation Products, and Biodegradable Polymers. The company offers thermal polyaspartates (TPAs) for oilfields to reduce scale and corrosion in various water systems; and for the agricultural industry to reduce fertilizer crystallization before, during, and after application, as well as to prevent crystal formation between fertilizer and minerals present in the soil. It also provides TPAs for irrigation to prevent early plugging of drip irrigation ports, reduce maintenance costs, and lengthen the life of equipment; TPAs for cleaning products to prevents the re-deposition of dirt onto the surfaces; and TPAs as additives for household laundry detergents, consumer care products, and pesticides. In addition, the company offers nitrogen conservation products for agriculture that slow down nitrogen loss from fields. Further, it provides HEATSAVR, a chemical product for use in swimming pools and spas that forms a thin and transparent layer on the water's surface; and WATERSAVR to reduce water evaporation in reservoirs, potable water storage tanks, livestock watering ponds, aqueducts, canals, and irrigation ditches, as well as for lawn and turf care, and potted and bedding plants. The company was incorporated in 1991 and is headquartered in Taber, Canada.