Analyzing Brenntag (OTCMKTS:BNTGY) and Kansai Paint (OTCMKTS:KSANF)

Kansai Paint (OTCMKTS:KSANF) and Brenntag (OTCMKTS:BNTGY) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Profitability

This table compares Kansai Paint and Brenntag’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kansai Paint	N/A	N/A	N/A
Brenntag	2.41%	8.34%	3.39%

Valuation & Earnings

This table compares Kansai Paint and Brenntag”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kansai Paint	N/A	N/A	N/A	$71.19	0.25
Brenntag	$17.16 billion	0.59	$299.37 million	$0.59	23.75

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

Analyst Recommendations

This is a breakdown of recent recommendations for Kansai Paint and Brenntag, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kansai Paint	0	0	0	0	0.00
Brenntag	1	8	0	0	1.89

Brenntag has a consensus target price of $12.80, indicating a potential downside of 8.64%. Given Brenntag’s stronger consensus rating and higher probable upside, analysts clearly believe Brenntag is more favorable than Kansai Paint.

Institutional and Insider Ownership

22.0% of Kansai Paint shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Kansai Paint pays an annual dividend of $12.35 per share and has a dividend yield of 70.6%. Brenntag pays an annual dividend of $0.25 per share and has a dividend yield of 1.8%. Kansai Paint pays out 17.3% of its earnings in the form of a dividend. Brenntag pays out 42.4% 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. Kansai Paint is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Brenntag beats Kansai Paint on 7 of the 11 factors compared between the two stocks.

About Kansai Paint

Kansai Paint Co., Ltd., together with its subsidiaries, manufactures and sells paints and coatings in Japan, India, Asia, Africa, Europe, and internationally. The company offers decorative coatings for protecting exterior and interior of buildings; automotive refinish coatings for dents and scrapes; and industrial coatings that are used in agricultural machinery, special-purpose vehicles, exterior building materials, metal products, beverage cans, and precoated metals used in metallic building materials and home appliances. It also offers marine coatings; automotive coatings for vehicle's conditions and aesthetics preservation, including film coating materials; and protective coatings for bridges, power equipment, industrial plants, and steel structures, as well as offers fire-resistant coatings. In addition, the company provides coatings solutions through electronic materials coating design technologies; and develops hydrogel fluid carrier beads that are used in various types of wastewater treatment. Further, it designs, manufactures, and sells coating equipment; controls and undertakes painting works; and designs color schemes. Kansai Paint Co., Ltd. was incorporated in 1918 and is headquartered in Osaka, Japan.

About Brenntag

Brenntag SE purchases and supplies various industrial and specialty chemicals, and ingredients in Germany, Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates in two segments, Brenntag Essentials and Brenntag Specialties. It provides just-in-time delivery, product mixing, blending, repackaging, inventory management, and drum return handling. The company serves customers in various end-market industries, including nutrition, pharma, personal care, water treatment, and lubricants; and home, industrial, and institutional markets, as well as coatings and constructions, polymers, and rubber industries. The company was founded in 1874 and is based in Essen, Germany.