Analyzing RPM International (NYSE:RPM) and Novozymes A/S (OTCMKTS:NVZMY)

RPM International (NYSE:RPM) and Novozymes A/S (OTCMKTS:NVZMY) are both large-cap materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for RPM International and Novozymes A/S, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RPM International	0	4	12	0	2.75
Novozymes A/S	0	1	0	2	3.33

RPM International presently has a consensus target price of $122.07, indicating a potential upside of 13.86%. Given RPM International’s higher possible upside, equities analysts clearly believe RPM International is more favorable than Novozymes A/S.

Institutional and Insider Ownership

80.9% of RPM International shares are owned by institutional investors. Comparatively, 0.0% of Novozymes A/S shares are owned by institutional investors. 1.5% of RPM International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

RPM International has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Novozymes A/S has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Dividends

RPM International pays an annual dividend of $2.28 per share and has a dividend yield of 2.1%. Novozymes A/S pays an annual dividend of $0.39 per share and has a dividend yield of 0.6%. RPM International pays out 42.2% of its earnings in the form of a dividend. Novozymes A/S pays out 23.1% 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. RPM International has increased its dividend for 51 consecutive years. RPM International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
RPM International	8.66%	22.03%	8.91%
Novozymes A/S	14.70%	6.54%	4.34%

Valuation and Earnings

This table compares RPM International and Novozymes A/S”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RPM International	$7.86 billion	1.74	$661.39 million	$5.40	19.85
Novozymes A/S	$4.70 billion	5.83	$660.28 million	$1.69	39.17

RPM International has higher revenue and earnings than Novozymes A/S. RPM International 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.

Summary

RPM International beats Novozymes A/S on 12 of the 18 factors compared between the two stocks.

About RPM International

RPM International Inc. manufactures and markets specialty coatings, sealants, building materials and related products for industrial, commercial and consumer markets. Its offerings include protective paints and coatings, roofing and waterproofing systems, flooring, construction sealants and adhesives, and maintenance products. The company sells products through a portfolio of well-known brands, including Rust-Oleum, DAP, Zinsser, Tremco, Carboline and Stonhard. Its products are used in applications ranging from home improvement and building construction to industrial and infrastructure maintenance.

About Novozymes A/S

Novozymes A/S was a Denmark-based biotechnology company that developed and produced enzymes and microorganisms for industrial and consumer applications. Its solutions were used in areas including household care, food and beverages, agriculture, animal health and bioenergy. The company’s products included enzymes used in detergents, baking, brewing and biofuel production, as well as microbial solutions for agricultural and other industrial processes. Novozymes served customers in markets around the world.