Sensient Technologies Corporation (SXT) versus Sigma-Aldrich (NASDAQ:SIAL) Critical Analysis

Sensient Technologies Corporation (NYSE: SXT) and Sigma-Aldrich (NASDAQ:SIAL) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, valuation, analyst recommendations, institutional ownership, profitability and earnings.

Dividends

Sensient Technologies Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. Sigma-Aldrich does not pay a dividend. Sensient Technologies Corporation pays out 48.4% of its earnings in the form of a dividend. Sensient Technologies Corporation has increased its dividend for 41 consecutive years and Sigma-Aldrich has increased its dividend for 5 consecutive years.

Earnings and Valuation

This table compares Sensient Technologies Corporation and Sigma-Aldrich’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sensient Technologies Corporation $1.36 billion 2.34 $247.07 million $2.48 29.28
Sigma-Aldrich N/A N/A N/A N/A N/A

Sensient Technologies Corporation has higher revenue and earnings than Sigma-Aldrich.

Profitability

This table compares Sensient Technologies Corporation and Sigma-Aldrich’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%
Sigma-Aldrich 16.22% 13.72% 10.47%

Analyst Ratings

This is a breakdown of current recommendations for Sensient Technologies Corporation and Sigma-Aldrich, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sensient Technologies Corporation 0 1 1 0 2.50
Sigma-Aldrich 0 0 0 0 N/A

Sensient Technologies Corporation presently has a consensus target price of $84.00, indicating a potential upside of 15.67%. Given Sensient Technologies Corporation’s higher probable upside, research analysts plainly believe Sensient Technologies Corporation is more favorable than Sigma-Aldrich.

Insider & Institutional Ownership

88.9% of Sensient Technologies Corporation shares are held by institutional investors. 1.0% of Sensient Technologies Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Sensient Technologies Corporation beats Sigma-Aldrich on 8 of the 11 factors compared between the two stocks.

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.

About Sigma-Aldrich

Sigma-Aldrich Corporation is a life science and high technology company. The Company develops, manufactures, purchases and distributes a range of biochemical and organic chemical products, kits and services that are used in scientific research. It manufactures and distributes around 250,000 chemicals, biochemical and other essential products and approximately 46,000 equipment products. Its business unit structure is aligned into three business units: Research, Applied and SAFC Commercial. Its brands include Sigma-Aldrich, Sigma, Aldrich, Fluka, Riedel-de Haen, Supelco, SAFC, SAFC Biosciences, SAFC Hitech, Genosys, Proligo, Pharmorphix, Cerilliant, Vetec, BioReliance and Cell Marque. It offers its products and services to research and applied labs, pharmaceutical companies, universities, commercial laboratories, industrial companies, biotechnology companies and non-profit organizations, among others. It operates in around 37 countries and sells into approximately 160 countries.

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