W. R. Grace & Co. (NYSE:GRA) and FMC (NYSE:FMC) are both basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.
Profitability
This table compares W. R. Grace & Co. and FMC's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
W. R. Grace & Co. | 0.76% | 55.80% | 5.10% |
FMC | 10.64% | 30.81% | 8.57% |
Volatility & Risk
W. R. Grace & Co. has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500. Comparatively, FMC has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for W. R. Grace & Co. and FMC, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
W. R. Grace & Co. | 0 | 2 | 6 | 0 | 2.75 |
FMC | 0 | 3 | 12 | 0 | 2.80 |
W. R. Grace & Co. currently has a consensus price target of $64.6250, suggesting a potential upside of 2.71%. FMC has a consensus price target of $126.2308, suggesting a potential upside of 13.53%. Given FMC's stronger consensus rating and higher probable upside, analysts clearly believe FMC is more favorable than W. R. Grace & Co..
Dividends
W. R. Grace & Co. pays an annual dividend of $1.32 per share and has a dividend yield of 2.1%. FMC pays an annual dividend of $1.92 per share and has a dividend yield of 1.7%. W. R. Grace & Co. pays out 30.1% of its earnings in the form of a dividend. FMC pays out 31.5% 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. W. R. Grace & Co. has increased its dividend for 1 consecutive years and FMC has increased its dividend for 1 consecutive years. W. R. Grace & Co. is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares W. R. Grace & Co. and FMC's revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
W. R. Grace & Co. | $1.96 billion | 2.13 | $126.30 million | $4.38 | 14.37 |
FMC | $4.61 billion | 3.12 | $477.40 million | $6.09 | 18.26 |
FMC has higher revenue and earnings than W. R. Grace & Co.. W. R. Grace & Co. is trading at a lower price-to-earnings ratio than FMC, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
84.8% of W. R. Grace & Co. shares are owned by institutional investors. Comparatively, 87.4% of FMC shares are owned by institutional investors. 0.9% of W. R. Grace & Co. shares are owned by insiders. Comparatively, 1.0% of FMC shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
FMC beats W. R. Grace & Co. on 11 of the 16 factors compared between the two stocks.