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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Johnson Matthey and Olin, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Johnson Matthey 0 0 2 0 3.00
Olin 0 2 7 0 2.78

Olin has a consensus target price of $38.00, indicating a potential upside of 17.54%. Given Olin’s higher probable upside, analysts plainly believe Olin is more favorable than Johnson Matthey.

Dividends

Johnson Matthey pays an annual dividend of $2.00 per share and has a dividend yield of 2.2%. Olin pays an annual dividend of $0.80 per share and has a dividend yield of 2.5%. Johnson Matthey pays out 36.4% of its earnings in the form of a dividend. Olin pays out 98.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Johnson Matthey and Olin’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
Olin 8.69% 5.81% 1.60%

Earnings and Valuation

This table compares Johnson Matthey and Olin’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Johnson Matthey $15.73 billion 0.56 $504.61 million $5.49 16.51
Olin $6.27 billion 0.86 $549.50 million $0.81 39.91

Olin has lower revenue, but higher earnings than Johnson Matthey. Johnson Matthey is trading at a lower price-to-earnings ratio than Olin, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

0.0% of Johnson Matthey shares are owned by institutional investors. Comparatively, 87.1% of Olin shares are owned by institutional investors. 1.7% of Olin shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

Johnson Matthey has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Olin has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Summary

Olin beats Johnson Matthey on 11 of the 15 factors compared between the two stocks.

About Johnson Matthey

Johnson Matthey Plc operates as a specialty chemicals company in North America, Europe, China, rest of Asia, and internationally. It operates in five divisions: Emission Control Technologies, Process Technologies, Precious Metal Products, Fine Chemicals, and New Businesses. The Emission Control Technologies division manufactures catalysts, which control harmful emissions from cars and other light duty vehicles powered by various types of fuel, as well as from diesel powered trucks, buses, and non-road machinery. The Process Technologies division manufactures catalysts, additives, and absorbents, as well as licenses process technologies; and delivers services to the petrochemical, biochemical, syngas, oil refining, and gas processing industries. The Precious Metal Products division manages, distributes, refines, and recycles precious metals and other special material using precious metals or related materials, platinum group metal catalysts, and platinum group metal chemicals for automotive and chemical markets; and develops and manufactures functional coatings and inks. The Fine Chemicals division develops and manufactures active pharmaceutical ingredients for various treatments, including pain management and attention deficit hyperactivity disorders; and specialty chemical, chiral, and biocatalytic technologies and products, as well as provides custom pharmaceutical research, development, and manufacturing services. This division also offers catalyst technologies for pharmaceutical, agrochemical, flavor, and fragrance applications. The New Businesses division is involved in the research, development, and manufacture of battery materials; design and supply of battery systems; and development and manufacture of catalysts and components for fuel cell markets. The company was formerly known as Johnson & Cock and changed its name to Johnson Matthey Plc in 1851. Johnson Matthey Plc was founded in 1817 and is based in London, the United Kingdom.

About Olin

Olin Corporation manufactures and distributes chemical products in the United States and internationally. It operates through three segments: Chlor Alkali Products and Vinyls; Epoxy; and Winchester. The Chlor Alkali Products and Vinyls segment offers chlorine and caustic soda, ethylene dichloride and vinyl chloride monomers, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, trichloroethylene and vinylidene chloride, hydrochloric acid, hydrogen, bleach products, and potassium hydroxide. The Epoxy segment provides allyl chloride and epichlorohydrin, as well as acetone, bisphenol, cumene, and phenol for use in resins and other plastic materials, water purification, and pesticides, as well as for the manufacturers of polymers; liquid and solid epoxy resins that are used in adhesives, paints and coatings, composites, and flooring; and differentiated epoxy resins for use in electrical laminates, paints and coatings, wind blades, electronics, and construction, as well as offers additives. The Winchester segment offers sporting ammunition products, including shotshells, small caliber centerfire, and rimfire ammunition products for hunters and recreational shooters, and law enforcement agencies; small caliber military ammunition products for use in infantry and mounted weapons; and industrial products comprising gauge loads and powder-actuated tool loads for maintenance applications in power and concrete industries, and construction industry. The company markets its products through its sales force, as well as directly to various industrial customers, mass merchants, retailers, wholesalers, other distributors, and the U.S. Government and its prime contractors. Olin Corporation was founded in 1892 and is headquartered in Clayton, Missouri.

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