Quaker Houghton (NYSE:KWR) versus H. B. Fuller (NYSE:FUL) Financial Comparison

H. B. Fuller (NYSE:FUL) and Quaker Houghton (NYSE:KWR) are both mid-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Profitability

This table compares H. B. Fuller and Quaker Houghton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
H. B. Fuller	3.28%	11.49%	4.24%
Quaker Houghton	-0.39%	8.35%	4.25%

Insider and Institutional Ownership

95.9% of H. B. Fuller shares are held by institutional investors. Comparatively, 77.5% of Quaker Houghton shares are held by institutional investors. 2.0% of H. B. Fuller shares are held by insiders. Comparatively, 1.1% of Quaker Houghton shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares H. B. Fuller and Quaker Houghton”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
H. B. Fuller	$3.50 billion	0.88	$130.26 million	$1.85	30.78
Quaker Houghton	$1.86 billion	1.25	$116.64 million	($0.49)	-274.38

H. B. Fuller has higher revenue and earnings than Quaker Houghton. Quaker Houghton is trading at a lower price-to-earnings ratio than H. B. Fuller, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

H. B. Fuller has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Quaker Houghton has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500.

Dividends

H. B. Fuller pays an annual dividend of $0.94 per share and has a dividend yield of 1.7%. Quaker Houghton pays an annual dividend of $2.03 per share and has a dividend yield of 1.5%. H. B. Fuller pays out 50.8% of its earnings in the form of a dividend. Quaker Houghton pays out -414.3% 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. H. B. Fuller has raised its dividend for 57 consecutive years and Quaker Houghton has raised its dividend for 17 consecutive years. H. B. Fuller is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for H. B. Fuller and Quaker Houghton, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
H. B. Fuller	1	2	3	2	2.75
Quaker Houghton	2	1	3	0	2.17

H. B. Fuller presently has a consensus target price of $67.75, suggesting a potential upside of 18.98%. Quaker Houghton has a consensus target price of $152.33, suggesting a potential upside of 13.30%. Given H. B. Fuller’s stronger consensus rating and higher possible upside, equities research analysts plainly believe H. B. Fuller is more favorable than Quaker Houghton.

Summary

H. B. Fuller beats Quaker Houghton on 13 of the 17 factors compared between the two stocks.

About H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.

About Quaker Houghton

Quaker Chemical Corporation, together with its subsidiaries, develops, produces, and markets various formulated specialty chemical products for a range of heavy industrial and manufacturing applications in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die-cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids, and surface treatment chemicals. The company also provides chemical management services. It serves steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies. The company was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.