Platform Specialty Products (NYSE: PAH) and Ferro (NYSE:FOE) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Earnings & Valuation

This table compares Platform Specialty Products and Ferro’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Platform Specialty Products $3.59 billion 0.76 -$73.70 million ($0.53) -17.85
Ferro $1.15 billion 1.71 -$20.81 million $0.53 44.15

Ferro has lower revenue, but higher earnings than Platform Specialty Products. Platform Specialty Products is trading at a lower price-to-earnings ratio than Ferro, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Platform Specialty Products and Ferro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Platform Specialty Products -4.12% 7.45% 2.15%
Ferro 3.44% 35.77% 7.57%

Risk and Volatility

Platform Specialty Products has a beta of 3.19, meaning that its stock price is 219% more volatile than the S&P 500. Comparatively, Ferro has a beta of 1.9, meaning that its stock price is 90% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Platform Specialty Products and Ferro, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Platform Specialty Products 0 3 6 0 2.67
Ferro 0 0 4 0 3.00

Platform Specialty Products presently has a consensus price target of $13.11, suggesting a potential upside of 38.60%. Ferro has a consensus price target of $23.00, suggesting a potential downside of 1.71%. Given Platform Specialty Products’ higher probable upside, equities analysts clearly believe Platform Specialty Products is more favorable than Ferro.

Institutional and Insider Ownership

93.5% of Platform Specialty Products shares are owned by institutional investors. Comparatively, 97.9% of Ferro shares are owned by institutional investors. 5.2% of Platform Specialty Products shares are owned by company insiders. Comparatively, 2.0% of Ferro shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Ferro beats Platform Specialty Products on 9 of the 14 factors compared between the two stocks.

About Platform Specialty Products

Platform Specialty Products Corporation produces and sells specialty chemical products in the Americas, the Asia-Pacific, and Europe. It operates through two segments, Performance Solutions and Agricultural Solutions. The Performance Solutions segment offers plating products that are used to plate holes; electroless nickel products, which are applied to various metal and plastic surfaces; electronic assembly materials for use in the electronic market and residential boiler systems; final finishes that are used on printed circuit boards; circuit formation products for surface preparation; oxides, which are used in the fabrication of multilayer circuit boards; semiconductor materials and packaging products; and pre-treatment and cleaning solutions. This segment also provides functional conversion coatings that are applied to metals to enhance corrosion resistance and paint adhesion; hard-coated films, which are used for the membrane switch in the touch screen markets; production and drilling fluids used in subsea control systems; solid sheet printing elements for use in flexographic printing and platemaking processes; liquid products to produce printing plates; and printing equipment. The Agricultural Solutions segment offers fungicides and biofungicides to prevent the spread of fungi and other diseases in crops; herbicides to control unwanted plants; insecticides, bioinsecticides, and acaricides; biostimulants and nutrition products; and seed treatment products, which are applied to seed before planting, as well as animal health products, such as honey bee protective miticides and veterinary vaccines. The company was formerly known as Platform Acquisition Holdings Limited and changed its name to Platform Specialty Products Corporation in October 2013. Platform Specialty Products Corporation was founded in 1922 and is headquartered in West Palm Beach, Florida.

About Ferro

Ferro Corporation (Ferro) produces specialty materials that are sold to a range of manufacturers. The Company’s segments include Performance Coatings (metal and ceramic coatings), Performance Colors and Glass (glass coatings), and Color Solutions. Its Performance Coatings segment includes Tile Coating Systems and Porcelain Enamel. Its manufacturers make products for various end-use markets. The Company’s products fall into two general categories: functional coatings, which perform specific functions in the manufacturing processes and end products of its customers, and color solutions, which provide aesthetic and performance characteristics to its customers’ products. Its products are used in a range of product applications in markets, including appliances, automobiles, building and renovation, electronics, household furnishings, industrial products and packaging.

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