Critical Contrast: H. B. Fuller (NYSE:FUL) and Basf (OTCMKTS:BASFY)

Basf (OTCMKTS:BASFY) and H. B. Fuller (NYSE:FUL) are both materials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Dividends

Basf pays an annual dividend of $0.47 per share and has a dividend yield of 3.3%. H. B. Fuller pays an annual dividend of $0.98 per share and has a dividend yield of 2.0%. Basf pays out 24.2% of its earnings in the form of a dividend. H. B. Fuller pays out 30.1% 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. H. B. Fuller has raised its dividend for 57 consecutive years. Basf is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Basf and H. B. Fuller’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Basf	9.40%	5.66%	2.51%
H. B. Fuller	5.56%	12.65%	4.97%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Basf and H. B. Fuller, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Basf	1	3	4	1	2.56
H. B. Fuller	0	3	4	1	2.75

H. B. Fuller has a consensus target price of $67.50, indicating a potential upside of 34.77%. Given H. B. Fuller’s stronger consensus rating and higher possible upside, analysts plainly believe H. B. Fuller is more favorable than Basf.

Institutional & Insider Ownership

0.0% of Basf shares are owned by institutional investors. Comparatively, 95.9% of H. B. Fuller shares are owned by institutional investors. 1.8% of H. B. Fuller shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Basf and H. B. Fuller”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Basf	$67.48 billion	0.76	$1.83 billion	$1.94	7.44
H. B. Fuller	$3.47 billion	0.78	$151.97 million	$3.26	15.36

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

Risk and Volatility

Basf has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500. Comparatively, H. B. Fuller has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.

Summary

H. B. Fuller beats Basf on 11 of the 16 factors compared between the two stocks.

About Basf

BASF SE operates as a chemical company worldwide. It operates through six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Agricultural Solutions. The Chemicals segment provides petrochemicals and intermediates. The Materials segment offers advanced materials and their precursors for applications and systems comprising isocyanates, polyamides, and inorganic basic products, as well as specialties for plastics and plastics processing industries. The Industrial Solutions segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, resins, additives, electronic materials, and antioxidants for automotive, plastics, paints and coatings, electronics, and energy and resource industries. The Surface Technologies segment provides automotive OEM and refinish coatings, surface treatment, catalysts, battery materials, and precious and base metal services for the automotive and chemical sectors. The Nutrition & Care segment offers ingredients for consumer goods in the areas of nutrition, home, personal care, and technical applications; and serves the food and feed producers, pharmaceutical, cosmetics, detergents, cleaners, and crop protection industries, as well as fast-moving consumer goods sector. The Agricultural Solutions segment provides seeds and seed treatment products; fungicides, herbicides, insecticides, and biological crop protection products; and digital farming solutions. The company engages in engineering and other; rental and leasing; and commodity trading activities. BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany.

About H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.