FMC (FMC) & Koninklijke DSM (OTCMKTS:RDSMY) Critical Contrast

Koninklijke DSM (OTCMKTS:RDSMY) and FMC (NYSE:FMC) are both large-cap basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Insider and Institutional Ownership

0.1% of Koninklijke DSM shares are held by institutional investors. Comparatively, 89.8% of FMC shares are held by institutional investors. 1.2% of FMC shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Koninklijke DSM and FMC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Koninklijke DSM 22.77% 14.16% 7.71%
FMC 23.96% 27.12% 8.40%

Dividends

Koninklijke DSM pays an annual dividend of $0.38 per share and has a dividend yield of 1.5%. FMC pays an annual dividend of $0.66 per share and has a dividend yield of 0.7%. Koninklijke DSM pays out 34.2% of its earnings in the form of a dividend. FMC pays out 24.4% 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. FMC has raised its dividend for 7 consecutive years.

Valuation and Earnings

This table compares Koninklijke DSM and FMC’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Koninklijke DSM $9.75 billion 1.88 $2.00 billion $1.11 22.69
FMC $2.88 billion 4.24 $535.80 million $2.71 33.45

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

Risk and Volatility

Koninklijke DSM has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, FMC has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Koninklijke DSM and FMC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Koninklijke DSM 0 0 1 0 3.00
FMC 0 1 13 0 2.93

FMC has a consensus price target of $103.31, indicating a potential upside of 13.95%. Given FMC’s higher possible upside, analysts plainly believe FMC is more favorable than Koninklijke DSM.

Summary

FMC beats Koninklijke DSM on 13 of the 17 factors compared between the two stocks.

Koninklijke DSM Company Profile

Koninklijke DSM N.V., a science-based company, engages in health, nutrition, and materials businesses worldwide. The company operates through three segments: Nutrition, Materials, and Innovation Center. The Nutrition segment offers nutrients, such as vitamins, carotenoids, nutritional lipids, and other ingredients to feed, food, pharmaceutical, and personal care industries; and food enzymes, cultures, yeast extracts, savory flavors, hydrocolloids, and other specialty ingredients for use in dairy, baking, beverage, and savory applications. The Materials segment provides Dyneema, a fiber solution serving textiles, commercial marine, and sports segments; high-performance plastics primarily for use in automotive and electronics markets, as well as offers solutions to specialized industries, including water management, breathable textiles, and flexible food packaging; and resins solutions for paints and coatings, fiber optic coatings, and 3D printing applications. The Innovation Center segment offers cellulosic bio-ethanol and bio-based succinic acids; anti-reflective coatings for solar glass; and anti-soiling coatings for use in cleaning and maintaining solar farms in desert-like conditions. This segment also produces biomedical materials and technologies that enable medical device manufacturers to enhance care across various medical specialties. Koninklijke DSM N.V. was founded in 1902 and is headquartered in Heerlen, the Netherlands.

FMC Company Profile

FMC Corporation, a diversified chemical company, provides solutions, applications, and products for the agricultural, consumer, and industrial markets worldwide. The company operates in two segments, FMC Agricultural Solutions and FMC Lithium. The FMC Agricultural Solutions segment develops, manufactures, markets, and sells crop protection chemicals, including insecticides, herbicides, and fungicides that are used in agriculture to enhance crop yield and quality by controlling a range of insects, weeds, and diseases, as well as in non-agricultural markets for pest control. The FMC Lithium segment manufactures lithium for use in batteries, polymers, pharmaceuticals, greases and lubricants, glass and ceramics, and other industrial uses. FMC Corporation was founded in 1883 and is headquartered in Philadelphia, Pennsylvania.

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