Critical Review: Orion Engineered Carbons S.A (OEC) & OCI Partners (OCIP)
Orion Engineered Carbons S.A (NYSE: OEC) and OCI Partners (NYSE:OCIP) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.
Valuation and Earnings
This table compares Orion Engineered Carbons S.A and OCI Partners’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Orion Engineered Carbons S.A||$1.37 billion||0.96||$269.86 million||$0.85||26.06|
|OCI Partners||$298.87 million||2.33||$93.85 million||($0.19)||-42.11|
Orion Engineered Carbons S.A has higher revenue and earnings than OCI Partners. OCI Partners is trading at a lower price-to-earnings ratio than Orion Engineered Carbons S.A, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Orion Engineered Carbons S.A has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, OCI Partners has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.
Orion Engineered Carbons S.A pays an annual dividend of $0.81 per share and has a dividend yield of 3.7%. OCI Partners pays an annual dividend of $0.48 per share and has a dividend yield of 6.0%. Orion Engineered Carbons S.A pays out 95.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. OCI Partners pays out -252.6% of its earnings in the form of a dividend. OCI Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
37.2% of Orion Engineered Carbons S.A shares are owned by institutional investors. Comparatively, 15.0% of OCI Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This is a summary of recent ratings and price targets for Orion Engineered Carbons S.A and OCI Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Orion Engineered Carbons S.A||0||1||2||0||2.67|
Orion Engineered Carbons S.A currently has a consensus target price of $23.33, suggesting a potential upside of 5.34%. OCI Partners has a consensus target price of $7.00, suggesting a potential downside of 12.50%. Given Orion Engineered Carbons S.A’s stronger consensus rating and higher possible upside, research analysts clearly believe Orion Engineered Carbons S.A is more favorable than OCI Partners.
This table compares Orion Engineered Carbons S.A and OCI Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Orion Engineered Carbons S.A||4.12%||148.13%||8.81%|
Orion Engineered Carbons S.A beats OCI Partners on 10 of the 14 factors compared between the two stocks.
Orion Engineered Carbons S.A Company Profile
Orion Engineered Carbons S.A. is a producer of carbon black. The Company operates through two segments: Specialty Carbon Black and Rubber Carbon Black. The Specialty Carbon Black segment is engaged in the production of specialty carbon black. The Rubber Carbon Black segment is involved in the production of rubber carbon black. As of December 31, 2016, it operated a diversified carbon black business with over 280 specialty carbon black grades and approximately 80 rubber carbon black grades. Carbon black is used as a pigment and as a performance additive in coatings, polymers, printing and special applications (specialty carbon black), and in the reinforcement of rubber in tires and mechanical rubber goods (rubber carbon black). As of December 31, 2016, it operated a global platform of 13 production facilities in Europe, North and South America, Asia and South Africa and three sales companies, as well as one jointly-owned production plant in Germany.
OCI Partners Company Profile
OCI Partners LP owns and operates an integrated methanol and ammonia production facility that is located on the Texas Gulf Coast near Beaumont. The Company has an annual methanol production capacity of approximately 912,500 metric tons and an annual ammonia production capacity of approximately 331,000 metric tons. It purchases natural gas from third parties and processes the natural gas into synthesis gas, which it then further processes in the production of methanol and ammonia. It stores and sells the processed methanol and ammonia to industrial and commercial customers for further processing or distribution. Its methanol production unit comprises Foster-Wheeler-designed twin steam methane reformers for synthesis gas production, over two Lurgi-designed parallel low-pressure, water-cooled reactors and approximately four distillation columns. The Haldor-Topsoe-designed ammonia synthesis loop at its facility processes hydrogen produced by methanol production process.
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