Versum Materials (NYSE: VSM) and Sensient Technologies Corporation (NYSE:SXT) are both mid-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.
Dividends
Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Sensient Technologies Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 1.6%. Sensient Technologies Corporation pays out 48.4% of its earnings in the form of a dividend. Versum Materials has increased its dividend for 5 consecutive years.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Versum Materials and Sensient Technologies Corporation, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Versum Materials | 0 | 4 | 6 | 0 | 2.60 |
| Sensient Technologies Corporation | 0 | 1 | 1 | 0 | 2.50 |
Versum Materials presently has a consensus price target of $33.78, suggesting a potential downside of 2.52%. Sensient Technologies Corporation has a consensus price target of $84.00, suggesting a potential upside of 15.37%. Given Sensient Technologies Corporation’s higher probable upside, analysts clearly believe Sensient Technologies Corporation is more favorable than Versum Materials.
Profitability
This table compares Versum Materials and Sensient Technologies Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Versum Materials | 17.91% | -261.88% | 18.25% |
| Sensient Technologies Corporation | 8.16% | 17.15% | 8.75% |
Earnings and Valuation
This table compares Versum Materials and Sensient Technologies Corporation’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Versum Materials | $1.08 billion | 3.49 | $355.80 million | N/A | N/A |
| Sensient Technologies Corporation | $1.36 billion | 2.35 | $247.07 million | $2.48 | 29.36 |
Versum Materials has higher revenue, but lower earnings than Sensient Technologies Corporation.
Insider & Institutional Ownership
89.1% of Versum Materials shares are held by institutional investors. Comparatively, 88.9% of Sensient Technologies Corporation shares are held by institutional investors. 0.5% of Versum Materials shares are held by insiders. Comparatively, 1.0% of Sensient Technologies Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
Versum Materials beats Sensient Technologies Corporation on 9 of the 14 factors compared between the two stocks.
About Versum Materials
Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.
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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