Critical Review: Novozymes A/S (OTCMKTS:NVZMY) versus Orion (NYSE:OEC)

Orion (NYSE:OEC) and Novozymes A/S (OTCMKTS:NVZMY) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Dividends

Orion pays an annual dividend of $0.08 per share and has a dividend yield of 1.5%. Novozymes A/S pays an annual dividend of $0.83 per share and has a dividend yield of 1.5%. Orion pays out -6.3% of its earnings in the form of a dividend. Novozymes A/S pays out 59.3% 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. Orion is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Orion has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Novozymes A/S has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Valuation and Earnings

This table compares Orion and Novozymes A/S”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion	$1.81 billion	0.17	-$70.10 million	($1.26)	-4.22
Novozymes A/S	$4.70 billion	5.01	$660.13 million	$1.40	40.62

Novozymes A/S has higher revenue and earnings than Orion. Orion is trading at a lower price-to-earnings ratio than Novozymes A/S, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Orion and Novozymes A/S, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion	4	1	0	0	1.20
Novozymes A/S	0	1	0	0	2.00

Orion currently has a consensus target price of $5.58, suggesting a potential upside of 4.95%. Given Orion’s higher possible upside, equities analysts clearly believe Orion is more favorable than Novozymes A/S.

Profitability

This table compares Orion and Novozymes A/S’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orion	-3.88%	6.52%	1.42%
Novozymes A/S	13.96%	6.38%	4.36%

Insider and Institutional Ownership

94.3% of Orion shares are owned by institutional investors. Comparatively, 0.0% of Novozymes A/S shares are owned by institutional investors. 2.7% of Orion shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Novozymes A/S beats Orion on 9 of the 15 factors compared between the two stocks.

About Orion

Orion S.A., together with its subsidiaries, engages in the manufacture and sale of carbon black products. It operates in two segments, Specialty Carbon Black and Rubber Carbon Black. The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for batteries, polymers, and coatings. It also provides rubber carbon black products for applications in mechanical rubber goods, as well as in tires under the ECORAX brand name; and acetylene-based conductive additives for lithium-ion batteries and other applications. It operates in the United States, Brazil, rest of the Americas, Germany, South Africa, Italy, Spain, Turkey, France, Rest of EMEA, China, the Republic of Korea, and rest of Asia. The company was formerly known as Orion Engineered Carbons S.A. and changed its name to Orion S.A. in June 2023. Orion S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.

About Novozymes A/S

Novozymes A/S produces and sells industrial enzymes, microorganisms, and probiotics in Denmark, rest of Europe, North America, Asia Pacific, the Middle East, Africa, Latin America, and internationally. The company offers protein solutions for the food and beverage industry. It also offers industrial hygiene, drain openers, hard surface, medical cleaning, septic tanks, ware washing, and professional laundry services. In addition, the company provides dishwashing, softener, microbial and medical cleaning services. Further, it provides corn, cotton, forages, peanuts, pulses, soybeans, wheat, small grains, bioyield, and biocontrol solutions; warm water species, recirculating aquaculture system; animal health and nutrition solutions; fiber modification, bleach boosting, deposit control, and starch modification solutions. Additionally, the company provides carbon capture, leather and textiles solutions; enzyme solutions, including corn and wheat separation, liquefaction, saccharification, filtration, isomerization, maltose, and specialties solutions; warm water species and recirculating aquaculture system solutions; human health solutions, comprising brain, oral, protective and immune, and gastrointestinal health solutions; ethanol, biodiesel, renewable diesel, education, wastewater, and sewage sludge, and renewable diesel solutions; agriculture and industry, biogas food waste, food waste, biocatalysis, cell culture, diagnostics, enzyme, and biogas solutions. Furthermore, it provides lipases, proteases, oxidoreductases, and carbohydrases. Novozymes A/S was founded in 1925 and is based in Bagsvaerd, Denmark.