Rayonier Advanced Materials (NYSE: RYAM) and OCI Partners (NYSE:OCIP) are both small-cap basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.
Profitability
This table compares Rayonier Advanced Materials and OCI Partners’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rayonier Advanced Materials | 5.71% | 24.17% | 3.63% |
| OCI Partners | -5.60% | -10.52% | -2.53% |
Insider & Institutional Ownership
88.7% of Rayonier Advanced Materials shares are held by institutional investors. Comparatively, 27.0% of OCI Partners shares are held by institutional investors. 2.1% of Rayonier Advanced Materials shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Dividends
Rayonier Advanced Materials pays an annual dividend of $0.28 per share and has a dividend yield of 2.0%. OCI Partners pays an annual dividend of $0.48 per share and has a dividend yield of 5.7%. Rayonier Advanced Materials pays out 35.0% of its earnings in the form of a dividend. OCI Partners pays out -252.6% 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. OCI Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings and Valuation
This table compares Rayonier Advanced Materials and OCI Partners’ top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Rayonier Advanced Materials | $840.05 million | 0.72 | $202.73 million | $0.80 | 17.38 |
| OCI Partners | $298.87 million | 2.43 | $93.85 million | ($0.19) | -43.95 |
Rayonier Advanced Materials has higher revenue and earnings than OCI Partners. OCI Partners is trading at a lower price-to-earnings ratio than Rayonier Advanced Materials, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Rayonier Advanced Materials and OCI Partners, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rayonier Advanced Materials | 0 | 0 | 5 | 0 | 3.00 |
| OCI Partners | 1 | 0 | 0 | 0 | 1.00 |
Rayonier Advanced Materials presently has a consensus price target of $19.20, indicating a potential upside of 38.13%. OCI Partners has a consensus price target of $7.00, indicating a potential downside of 16.17%. Given Rayonier Advanced Materials’ stronger consensus rating and higher possible upside, analysts clearly believe Rayonier Advanced Materials is more favorable than OCI Partners.
Volatility & Risk
Rayonier Advanced Materials has a beta of 4.28, suggesting that its share price is 328% more volatile than the S&P 500. Comparatively, OCI Partners has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.
Summary
Rayonier Advanced Materials beats OCI Partners on 12 of the 15 factors compared between the two stocks.
About Rayonier Advanced Materials
Rayonier Advanced Materials Inc. is engaged in the production of cellulose specialties. The Company’s product lines include cellulose specialties and commodity products. Its products are used in manufacturing processes. The Company’s products are sold throughout the world to companies for use in various industrial applications, and to produce a range of products, including cigarette filters, foods, pharmaceuticals, textiles and electronics. The Company focuses on producing various forms of cellulose specialties products, such as cellulose acetate and cellulose ethers. The Company’s production facilities are located in Jesup, Georgia and Fernandina Beach, Florida. The Jesup plant can produce cellulose specialties or commodity products using both hardwood and softwood in a pre-hydrolyzed kraft or high potential of hydrogen (pH) cooking process. The Fernandina Beach plant can produce cellulose specialties or commodity products using softwood in a sulfite or low pH cooking process.
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.
Receive News & Ratings for Rayonier Advanced Materials Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Rayonier Advanced Materials Inc. and related companies with MarketBeat.com's FREE daily email newsletter.
