Financial Review: Ashland Global (ASH) versus Johnson Matthey (JMPLY)

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Johnson Matthey (OTCMKTS:JMPLY) and Ashland Global (NYSE:ASH) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Johnson Matthey and Ashland Global, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Johnson Matthey 0 0 2 0 3.00
Ashland Global 0 2 8 0 2.80

Ashland Global has a consensus target price of $91.75, suggesting a potential upside of 9.71%. Given Ashland Global’s higher possible upside, analysts clearly believe Ashland Global is more favorable than Johnson Matthey.

Institutional & Insider Ownership

0.0% of Johnson Matthey shares are owned by institutional investors. Comparatively, 93.3% of Ashland Global shares are owned by institutional investors. 1.1% of Ashland Global shares are owned 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.

Risk & Volatility

Johnson Matthey has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500. Comparatively, Ashland Global has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500.

Earnings & Valuation

This table compares Johnson Matthey and Ashland Global’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Johnson Matthey $18.73 billion 0.41 $395.35 million $5.52 14.21
Ashland Global $3.74 billion 1.39 $1.00 million $3.58 23.36

Johnson Matthey has higher revenue and earnings than Ashland Global. Johnson Matthey is trading at a lower price-to-earnings ratio than Ashland Global, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Johnson Matthey and Ashland Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Johnson Matthey N/A N/A N/A
Ashland Global 3.05% 6.71% 2.74%

Dividends

Johnson Matthey pays an annual dividend of $2.98 per share and has a dividend yield of 3.8%. Ashland Global pays an annual dividend of $1.00 per share and has a dividend yield of 1.2%. Johnson Matthey pays out 54.0% of its earnings in the form of a dividend. Ashland Global pays out 27.9% 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.

Summary

Ashland Global beats Johnson Matthey on 10 of the 16 factors compared between the two stocks.

About Johnson Matthey

Johnson Matthey is a global leader in science that enables a cleaner and healthier world. With over 200 years of sustained commitment to innovation and technological breakthroughs, they improve the function, performance and safety of their customers’ products. Their science has a global impact in areas such as low emission transport, pharmaceuticals, chemical processing and making the most efficient use of the planet’s natural resources. Today more than 13,000 Johnson Matthey professionals collaborate with their network of customers and partners to make a real difference to the world around us.

About Ashland Global

Ashland Global Holdings Inc. provides specialty chemical solutions worldwide. Its Specialty Ingredients segment provides products, technologies, and resources for solving formulation and product-performance challenges. It offers solutions using natural, synthetic, and semisynthetic polymers derived from plant and seed extract, cellulose ethers, vinyl pyrrolidones, and acrylic polymers, as well as polyester and polyurethane-based adhesives. This segment offers its solutions for pharmaceutical companies; makers of personal care products, food, and beverages; manufacturers of paint, coatings, and construction materials; makers of nutraceuticals and supplements; packaging and converting markets; and oilfield service companies. The company's Composites segment manufactures and sells a range of unsaturated polyester and vinyl ester resins, gelcoats, and low-profile additives for the reinforced plastics industry; and molten maleic anhydride for the manufacture of various products, such as unsaturated polyester resins, copolymers, lubricating oil additives, alkenyl succinic anhydrides, malic acid, fumaric acid, and derivative chemicals. This segment serves manufacturers of residential and commercial building products; industrial product specifiers and manufacturers; wind blade and pipe manufacturers; automotive and truck OEM suppliers; boat builders; chemical producers; and electronics makers. Its Intermediates and Solvents segment produces 1,4 butanediol and related derivatives, including tetrahydrofuran and n-methylpyrrolidone that are used as chemical intermediates in the production of engineering polymers and polyurethanes, as well as specialty process solvents used in electronics, pharmaceuticals, water filtration membranes, and others. The company was formerly known as Ashland Inc. and changed its name to Ashland Global Holdings Inc. in September 2016. Ashland Global Holdings Inc. was founded in 1924 and is headquartered in Covington, Kentucky.

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