OCI Partners (OCIP) versus Sensient Technologies Corporation (SXT) Financial Analysis
OCI Partners (NYSE: OCIP) and Sensient Technologies Corporation (NYSE:SXT) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.
OCI Partners pays an annual dividend of $0.48 per share and has a dividend yield of 6.4%. Sensient Technologies Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 1.5%. OCI Partners pays out -252.6% of its earnings in the form of a dividend. Sensient Technologies Corporation pays out 48.4% 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. Sensient Technologies Corporation has raised its dividend for 5 consecutive years. OCI Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
This is a breakdown of recent recommendations and price targets for OCI Partners and Sensient Technologies Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sensient Technologies Corporation||0||0||2||0||3.00|
OCI Partners presently has a consensus target price of $7.00, suggesting a potential downside of 6.04%. Sensient Technologies Corporation has a consensus target price of $89.15, suggesting a potential upside of 13.45%. Given Sensient Technologies Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Sensient Technologies Corporation is more favorable than OCI Partners.
Institutional and Insider Ownership
15.0% of OCI Partners shares are owned by institutional investors. Comparatively, 89.0% of Sensient Technologies Corporation shares are owned by institutional investors. 1.0% of Sensient Technologies Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares OCI Partners and Sensient Technologies Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sensient Technologies Corporation||8.16%||17.15%||8.75%|
Volatility and Risk
OCI Partners has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, Sensient Technologies Corporation has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.
Earnings and Valuation
This table compares OCI Partners and Sensient Technologies Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|OCI Partners||$298.87 million||2.17||$93.85 million||($0.19)||-39.21|
|Sensient Technologies Corporation||$1.36 billion||2.53||$247.07 million||$2.48||31.69|
Sensient Technologies Corporation has higher revenue and earnings than OCI Partners. OCI Partners is trading at a lower price-to-earnings ratio than Sensient Technologies Corporation, indicating that it is currently the more affordable of the two stocks.
Sensient Technologies Corporation beats OCI Partners on 13 of the 16 factors compared between the two stocks.
About OCI Partners
OCI Partners LP owns and operates an integrated methanol and ammonia production facility that is located on the Texas Gulf Coast near Beaumont. The Company has an annual methanol production capacity of approximately 912,500 metric tons and an annual ammonia production capacity of approximately 331,000 metric tons. It purchases natural gas from third parties and processes the natural gas into synthesis gas, which it then further processes in the production of methanol and ammonia. It stores and sells the processed methanol and ammonia to industrial and commercial customers for further processing or distribution. Its methanol production unit comprises Foster-Wheeler-designed twin steam methane reformers for synthesis gas production, over two Lurgi-designed parallel low-pressure, water-cooled reactors and approximately four distillation columns. The Haldor-Topsoe-designed ammonia synthesis loop at its facility processes hydrogen produced by methanol production process.
About Sensient Technologies Corporation
Sensient Technologies Corporation is a manufacturer and marketer of colors, flavors and fragrances. The Company uses technologies at facilities around the world to develop specialty food and beverage systems, cosmetic and pharmaceutical systems, specialty inks and colors, and other specialty and fine chemicals. The Company’s three segments include the Flavors & Fragrances Group and the Color Group, which are managed on a product-and-services basis, and the Asia Pacific Group, which is managed on a geographic basis. The Company’s principal products include flavors, flavor enhancers and bionutrients; fragrances, aroma chemicals and essential oils; natural ingredients, including dehydrated vegetables and other food ingredients; natural and synthetic food and beverage colors; cosmetic colors and ingredients and pharmaceutical excipients and ingredients, and technical colors, specialty inks and colors, and specialty dyes and pigments.
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