Comparing Johnson Matthey (OTCMKTS:JMPLY) and Stepan (NYSE:SCL)

Johnson Matthey (OTCMKTS:JMPLY) and Stepan (NYSE:SCL) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Institutional & Insider Ownership

82.7% of Stepan shares are owned by institutional investors. 6.6% of Stepan shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Johnson Matthey and Stepan”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Johnson Matthey	$16.85 billion	0.29	$475.91 million	N/A	N/A
Stepan	$2.33 billion	0.51	$46.90 million	($0.62)	-85.20

Johnson Matthey has higher revenue and earnings than Stepan.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Johnson Matthey and Stepan, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Johnson Matthey	1	2	1	2	2.67
Stepan	2	0	0	0	1.00

Volatility and Risk

Johnson Matthey has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, Stepan has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Dividends

Johnson Matthey pays an annual dividend of $1.16 per share and has a dividend yield of 2.0%. Stepan pays an annual dividend of $1.58 per share and has a dividend yield of 3.0%. Stepan pays out -254.8% of its earnings in the form of a dividend. Stepan has raised its dividend for 57 consecutive years. Stepan is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Johnson Matthey and Stepan’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Johnson Matthey	N/A	N/A	N/A
Stepan	-0.61%	2.65%	1.37%

Summary

Stepan beats Johnson Matthey on 8 of the 15 factors compared between the two stocks.

About Johnson Matthey

Johnson Matthey is a global leader in science that enables a cleaner and healthier world. With over 200 years of sustained commitment to innovation and technological breakthroughs, they improve the function, performance and safety of their customers’ products. Their science has a global impact in areas such as low emission transport, pharmaceuticals, chemical processing and making the most efficient use of the planet’s natural resources. Today more than 13,000 Johnson Matthey professionals collaborate with their network of customers and partners to make a real difference to the world around us.

About Stepan

Stepan Company, together with its subsidiaries, produces and sells specialty and intermediate chemicals to other manufacturers for use in various end products worldwide. It operates through three segments: Surfactants, Polymers, and Specialty Products. The Surfactants segment offers surfactants that are used in consumer and industrial cleaning and disinfection products, including detergents for washing clothes, dishes, carpets, and floors and walls, as well as shampoos and body washes; and other applications, such as fabric softeners, germicidal quaternary compounds, disinfectants, and lubricating ingredients. Its surfactants are also used in various applications, including emulsifiers for spreading agricultural products; and industrial applications comprising latex systems, plastics, and composites. The Polymers segment provides polyurethane polyols that are used in the manufacture of rigid foam for thermal insulation in the construction industry, as well as a base raw material for coatings, adhesives, sealants, and elastomers (CASE); polyester resins, including liquid and powdered products, which are used in CASE applications; and phthalic anhydride that is used in unsaturated polyester resins, alkyd resins, and plasticizers for applications in construction materials, as well as components of automotive, boating, and other consumer products. The Specialty Products segment offers flavors, emulsifiers, and solubilizers for use in food, flavoring, nutritional supplement, and pharmaceutical applications. Stepan Company was founded in 1932 and is headquartered in Northbrook, Illinois.