Critical Contrast: Tosoh (TOSCF) and Versum Materials (VSM)

Tosoh (OTCMKTS: TOSCF) and Versum Materials (NYSE:VSM) are both mid-cap basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.

Dividends

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Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Tosoh does not pay a dividend. Versum Materials pays out 10.5% of its earnings in the form of a dividend.

Profitability

This table compares Tosoh and Versum Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tosoh N/A N/A N/A
Versum Materials 13.55% 6,666.66% 17.66%

Insider & Institutional Ownership

92.2% of Versum Materials shares are held by institutional investors. 0.5% of Versum Materials shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Tosoh and Versum Materials’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tosoh $6.87 billion 0.96 $702.17 million $2.16 9.36
Versum Materials $1.13 billion 3.64 $193.00 million $1.91 19.70

Tosoh has higher revenue and earnings than Versum Materials. Tosoh is trading at a lower price-to-earnings ratio than Versum Materials, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Tosoh and Versum Materials, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tosoh 0 0 0 0 N/A
Versum Materials 0 1 6 0 2.86

Versum Materials has a consensus price target of $38.71, suggesting a potential upside of 2.88%. Given Versum Materials’ higher possible upside, analysts clearly believe Versum Materials is more favorable than Tosoh.

Summary

Versum Materials beats Tosoh on 10 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.

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