A. Schulman (NASDAQ: SHLM) and Airgas (NYSE:ARG) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Analyst Ratings

This is a summary of current recommendations for A. Schulman and Airgas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
A. Schulman 0 2 2 0 2.50
Airgas 0 0 0 0 N/A

A. Schulman presently has a consensus price target of $35.00, indicating a potential upside of 13.09%. Given A. Schulman’s higher possible upside, research analysts plainly believe A. Schulman is more favorable than Airgas.

Profitability

This table compares A. Schulman and Airgas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
A. Schulman -14.86% 35.64% 3.29%
Airgas 5.98% 15.44% 5.04%

Earnings & Valuation

This table compares A. Schulman and Airgas’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
A. Schulman $2.42 billion 0.38 $207.01 million ($12.50) -2.48
Airgas N/A N/A N/A N/A N/A

A. Schulman has higher revenue and earnings than Airgas.

Dividends

A. Schulman pays an annual dividend of $0.82 per share and has a dividend yield of 2.6%. Airgas does not pay a dividend. A. Schulman pays out -6.6% of its earnings in the form of a dividend. A. Schulman has increased its dividend for 14 consecutive years.

Institutional & Insider Ownership

84.2% of A. Schulman shares are held by institutional investors. 4.1% of A. Schulman shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

A. Schulman beats Airgas on 9 of the 11 factors compared between the two stocks.

About A. Schulman

A. Schulman, Inc. is an international supplier of plastic formulations, resins and services, and provides solutions to its customers’ requirements through custom-formulated products. The Company’s customers span a range of markets, such as packaging, mobility, building and construction, electronics and electrical, agriculture, personal care and hygiene, custom services, and sports, home and leisure. The Company’s segments include Europe, Middle East and Africa (EMEA), the United States and Canada (USCAN), Latin America (LATAM), Asia Pacific (APAC) and Engineered Composites (EC). As of August 31, 2016, the Company operated in six product families, including custom performance colors (CPC), engineered composites, Masterbatch solutions, engineered plastics, specialty powders and distribution services. The CPC product family offers powdered, pelletized and liquid color concentrates that are custom-designed for thermoplastic resins.

About Airgas

Airgas, Inc. is a supplier of industrial, medical and specialty gases, and hard goods, such as welding equipment and related products. The Company is also a producer of atmospheric gases, carbon dioxide, dry ice and nitrous oxide and a supplier of safety products, refrigerants, ammonia products and process chemicals. It operates through two segments: Distribution and All Other Operations. The Distribution segment offers a portfolio of related gas and hard goods products and services to the end customers. The All Other Operations segment consists of five business units which manufacture or distribute carbon dioxide, dry ice, nitrous oxide, ammonia and refrigerant gases. It also offers supply chain management services and solutions, and product and process technical support across many customer segments. It markets its products and services through multiple sales channels, including branch-based sales representatives, retail stores and strategic customer account programs, among others.

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