Critical Review: Minerals Technologies (MTX) vs. OCI Partners (OCIP)

Minerals Technologies (NYSE: MTX) and OCI Partners (NYSE:OCIP) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Insider and Institutional Ownership

94.2% of Minerals Technologies shares are held by institutional investors. Comparatively, 15.0% of OCI Partners shares are held by institutional investors. 2.2% of Minerals Technologies 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 Minerals Technologies and OCI Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Minerals Technologies 9.48% 14.59% 5.57%
OCI Partners -1.79% -3.70% -0.86%

Analyst Ratings

This is a summary of current recommendations for Minerals Technologies and OCI Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Minerals Technologies 0 1 1 0 2.50
OCI Partners 1 0 0 0 1.00

Minerals Technologies presently has a consensus target price of $80.00, suggesting a potential upside of 16.19%. OCI Partners has a consensus target price of $7.00, suggesting a potential downside of 13.04%. Given Minerals Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe Minerals Technologies is more favorable than OCI Partners.

Risk & Volatility

Minerals Technologies has a beta of 2.25, suggesting that its share price is 125% more volatile than the S&P 500. Comparatively, OCI Partners has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500.

Dividends

Minerals Technologies pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. OCI Partners pays an annual dividend of $0.32 per share and has a dividend yield of 4.0%. Minerals Technologies pays out 4.6% of its earnings in the form of a dividend. OCI Partners pays out -533.3% 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.

Valuation & Earnings

This table compares Minerals Technologies and OCI Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Minerals Technologies $1.64 billion 1.49 $133.40 million $4.39 15.68
OCI Partners $258.23 million 2.71 -$50.55 million ($0.06) -134.17

Minerals Technologies has higher revenue and earnings than OCI Partners. OCI Partners is trading at a lower price-to-earnings ratio than Minerals Technologies, indicating that it is currently the more affordable of the two stocks.

Summary

Minerals Technologies beats OCI Partners on 13 of the 16 factors compared between the two stocks.

Minerals Technologies Company Profile

Minerals Technologies Inc. is a resource- and technology-based company that develops, produces and markets a range of specialty mineral, mineral-based and synthetic mineral products and related systems and services around the world. It operates through four segments. The Specialty Minerals segment produces and sells the synthetic mineral product precipitated calcium carbonate (PCC), mines mineral ores, and processes and sells natural mineral products, primarily limestone and talc. The Performance Materials segment is a supplier of bentonite and bentonite-related products to industrial and consumer markets globally. The Refractories segment produces and markets monolithic and shaped refractory materials and specialty products, services and application and measurement equipment. The Energy Services segment offers a range of services to improve the production, costs, compliance and environmental impact of activities performed in the oil and gas industry.

OCI Partners Company Profile

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.

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