Contrasting AdvanSix (NYSE:ASIX) & Koppers (NYSE:KOP)

AdvanSix (NYSE:ASIX) and Koppers (NYSE:KOP) are both small-cap materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Risk and Volatility

AdvanSix has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, Koppers has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500.

Profitability

This table compares AdvanSix and Koppers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AdvanSix	-1.14%	-1.28%	-0.61%
Koppers	-4.59%	14.98%	4.17%

Institutional & Insider Ownership

86.4% of AdvanSix shares are owned by institutional investors. Comparatively, 92.7% of Koppers shares are owned by institutional investors. 5.0% of AdvanSix shares are owned by company insiders. Comparatively, 7.3% of Koppers shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares AdvanSix and Koppers”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AdvanSix	$1.56 billion	0.28	$49.29 million	($0.66)	-24.55
Koppers	$1.88 billion	0.44	$56.00 million	($4.72)	-9.22

Koppers has higher revenue and earnings than AdvanSix. AdvanSix is trading at a lower price-to-earnings ratio than Koppers, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for AdvanSix and Koppers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AdvanSix	1	2	0	0	1.67
Koppers	1	1	1	1	2.50

AdvanSix presently has a consensus price target of $21.50, indicating a potential upside of 32.72%. Koppers has a consensus price target of $55.00, indicating a potential upside of 26.32%. Given AdvanSix’s higher possible upside, equities research analysts clearly believe AdvanSix is more favorable than Koppers.

Dividends

AdvanSix pays an annual dividend of $0.64 per share and has a dividend yield of 4.0%. Koppers pays an annual dividend of $0.36 per share and has a dividend yield of 0.8%. AdvanSix pays out -97.0% of its earnings in the form of a dividend. Koppers pays out -7.6% 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. AdvanSix has raised its dividend for 2 consecutive years and Koppers has raised its dividend for 2 consecutive years. AdvanSix is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Koppers beats AdvanSix on 11 of the 17 factors compared between the two stocks.

About AdvanSix

AdvanSix Inc. engages in the manufacture and sale of polymer resins in the United States and internationally. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam to manufacture polymer resins; ammonium sulfate fertilizers to distributors, farm cooperatives, and retailers; and acetone that are used in the production of adhesives, paints, coatings, solvents, herbicides, and engineered plastic resins, as well as other intermediate chemicals, including phenol, monoisopropylamine, dipropylamine, monoallylamine, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, acetaldehyde oxime, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. The company sells its products directly, as well as through distributors. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.

About Koppers

Koppers Holdings Inc. provides treated wood products, wood preservation chemicals, and carbon compounds in the United States, Australasia, Europe, and internationally. The company operates through Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC), and Carbon Materials and Chemicals (CMC) segments. The RUPS segment procures and treats crossties, switch ties, and various types of lumber used for railroad bridges and crossings. It also provides rail joint bars to join rails together for railroads; transmission and distribution poles for electric and telephone utilities; and pilings. This segment provides railroad services, such as engineering, design, repair, and inspection services for railroad bridges. The PC segment develops, manufactures, and markets copper-based wood preservatives, including micronized copper azole, micronized pigments, alkaline copper quaternary, amine copper azole, and chromated copper arsenate for decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses; and supplies fire-retardant chemicals for pressure treatment of wood primarily in commercial construction. The CMC segment manufactures creosote for the treatment of wood or as a feedstock in the production of carbon black; carbon pitch, a raw material used in the production of aluminum and steel; naphthalene for use as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete; phthalic anhydride for the production of plasticizers, polyester resins, and alkyd paints; and carbon black feedstock for use in the production of carbon black. It serves the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber, and construction sectors. Koppers Holdings Inc. was founded in 1988 and is based in Pittsburgh, Pennsylvania.