FutureFuel (NYSE: FF) and International Flavors & Fragrances (NYSE:IFF) are both oils/energy companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, risk, valuation, dividends, profitability, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

44.1% of FutureFuel shares are held by institutional investors. Comparatively, 82.5% of International Flavors & Fragrances shares are held by institutional investors. 43.3% of FutureFuel shares are held by company insiders. Comparatively, 0.5% of International Flavors & Fragrances shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

FutureFuel pays an annual dividend of $0.24 per share and has a dividend yield of 1.7%. International Flavors & Fragrances pays an annual dividend of $2.76 per share and has a dividend yield of 2.2%. International Flavors & Fragrances pays out 46.9% of its earnings in the form of a dividend. International Flavors & Fragrances has increased its dividend for 8 consecutive years. International Flavors & Fragrances is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for FutureFuel and International Flavors & Fragrances, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FutureFuel 0 0 0 0 N/A
International Flavors & Fragrances 2 4 5 0 2.27

International Flavors & Fragrances has a consensus price target of $144.63, indicating a potential upside of 14.59%. Given International Flavors & Fragrances’ higher possible upside, analysts plainly believe International Flavors & Fragrances is more favorable than FutureFuel.

Risk & Volatility

FutureFuel has a beta of 1.69, suggesting that its share price is 69% more volatile than the S&P 500. Comparatively, International Flavors & Fragrances has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Valuation & Earnings

This table compares FutureFuel and International Flavors & Fragrances’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FutureFuel $275.03 million 2.22 $23.51 million N/A N/A
International Flavors & Fragrances $3.40 billion 2.93 $295.66 million $5.89 21.43

International Flavors & Fragrances has higher revenue and earnings than FutureFuel.

Profitability

This table compares FutureFuel and International Flavors & Fragrances’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FutureFuel 21.86% 13.62% 10.95%
International Flavors & Fragrances 8.83% 27.89% 10.46%

Summary

International Flavors & Fragrances beats FutureFuel on 10 of the 15 factors compared between the two stocks.

FutureFuel Company Profile

FutureFuel Corp., through its subsidiaries, manufactures and sells diversified chemical products, bio-based products, and bio-based specialty chemical products in the United States. It operates in two segments, Chemicals and Biofuels. The Chemicals segment manufactures and sells custom chemicals, including agrochemicals and intermediates, detergent additives, biocides intermediates, specialty polymers, dyes, stabilizers, and chemicals intermediates; and chemicals used in consumer products consisting of cosmetics and personal care products, specialty polymers, and specialty products used in the fuels industry. This segment also offers performance chemicals, such as polymer modifiers that enhance stain resistance and dye-ability to nylon and polyester fibers; various small-volume specialty chemicals and solvents for a range of applications; and a family of acetal based solvents, including diethoxymethane, dimethoxymethane, dibutoxymethane, glycerol formal, and phenol sulfonic acid. Its chemical products are used in various markets and end uses comprising detergent, agrochemical, automotive, oil and gas, coatings, nutrition, and polymer additives. The Biofuels segment produces and sells biodiesel. It also sells petrodiesel in blends; and engages in buying, selling, and shipping of refined petroleum products on common carrier pipelines. This segment markets its biodiesel products directly to customers through railcars, tank trucks, and barges in the United States. The company was formerly known as Viceroy Acquisition Corporation and changed its name to FutureFuel Corp. in October 2006. FutureFuel Corp. was incorporated in 2005 and is headquartered in Clayton, Missouri.

International Flavors & Fragrances Company Profile

International Flavors & Fragrances Inc., together with its subsidiaries, manufactures flavors and fragrances for use in various consumer products. It operates through two segments, Flavors and Fragrances. The Flavors segment offers flavor compounds primarily to the food and beverage industries for use in consumer products, such as prepared foods, beverages, dairy, food, and sweet products. The Fragrances segment provides fragrance compounds, which include fine fragrances comprising perfumes and colognes, as well as consumer fragrances for personal care, household products, and beauty care; fragrance ingredients comprising synthetic and natural ingredients that could be combined with other materials to create fragrance and consumer compounds; and cosmetic active ingredients consisting of active and functional ingredients, botanicals, and delivery systems to support its customers' cosmetic and personal care product lines. This segment serves perfume and toiletries manufacturers in the cosmetics industry; and manufacturers of soaps, detergents, fabric care, household cleaners, and air fresheners in the household products industry. The company has operations in Europe, Africa, the Middle East, Greater Asia, North America, and Latin America. International Flavors & Fragrances Inc. was founded in 1833 and is headquartered in New York, New York.

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