Contrasting Akzo Nobel (AKZOD) & RPM International (RPM)

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Akzo Nobel (OTCMKTS:AKZOD) and RPM International (NYSE:RPM) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, profitability, analyst recommendations, institutional ownership and dividends.

Earnings and Valuation

This table compares Akzo Nobel and RPM International’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Akzo Nobel $10.86 billion 1.93 $940.40 million $1.86 16.52
RPM International $5.32 billion 1.41 $337.77 million $2.92 19.48

Akzo Nobel has higher revenue and earnings than RPM International. Akzo Nobel is trading at a lower price-to-earnings ratio than RPM International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Akzo Nobel and RPM International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Akzo Nobel 9.76% 9.43% 3.69%
RPM International 4.47% 21.39% 6.58%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Akzo Nobel and RPM International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Akzo Nobel 0 0 0 0 N/A
RPM International 2 4 4 0 2.20

RPM International has a consensus target price of $65.00, suggesting a potential upside of 14.30%. Given RPM International’s higher possible upside, analysts plainly believe RPM International is more favorable than Akzo Nobel.

Institutional and Insider Ownership

0.2% of Akzo Nobel shares are held by institutional investors. Comparatively, 75.6% of RPM International shares are held by institutional investors. 1.8% of RPM International shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Akzo Nobel pays an annual dividend of $0.25 per share and has a dividend yield of 0.8%. RPM International pays an annual dividend of $1.40 per share and has a dividend yield of 2.5%. Akzo Nobel pays out 13.4% of its earnings in the form of a dividend. RPM International pays out 47.9% 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. RPM International has increased its dividend for 44 consecutive years. RPM International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Akzo Nobel has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, RPM International has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

Summary

RPM International beats Akzo Nobel on 11 of the 16 factors compared between the two stocks.

About Akzo Nobel

Akzo Nobel N.V. operates as a paints and coatings company in the Netherlands and internationally. The company operates through Decorative Paints and Performance Coatings segments. It provides decorative paints, including paints, lacquers, and varnishes; mixing machines, color concepts, and training courses for the building and renovation industry; and specialty coatings for metal, wood, and other building materials. The company offers its decorative paints under the Alba, Astral, Bruguer, Coral, Dulux, Flexa, Inca, Levis, Marshall, Nordsjo, Sadolin, Sikkens, and Vivechrome brands. It also offers performance coatings to protect and enhance ships, cars, aircraft, yachts, architectural components, consumer goods, and oil and gas facilities. The company was formerly known as Akzo NV and changed its name to Akzo Nobel N.V. in 1994. Akzo Nobel N.V. was founded in 1646 and is headquartered in Amsterdam, the Netherlands.

About RPM International

RPM International Inc. manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. Its Industrial segment offers waterproofing, coatings, and institutional roofing systems; sealants, air barriers, tapes, and foams; residential home weatherization systems; roofing and building maintenance and related services; sealing and bonding, and flooring and in-plant glazing solutions; solutions for fire stopping and intumescent steel coating, and the manufacturing industry; polymer flooring systems; and fiberglass reinforced plastic gratings and shapes. It also offers corrosion-control coating, containment lining, fire and sound proofing, and insulation products; rolled asphalt roofing materials and chemical admixtures; concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps, and restoration materials; specialty construction products; and amine curing agents, reactive diluents, specialty epoxy resins and other intermediates. The company's Specialty segment provides fluorescent colorants and pigments; shellac-based-specialty and marine coatings; insulated building cladding materials; fire and water damage restoration, and carpet cleaning and disinfecting products; fuel additives; and wood treatments, furniture finishes, and touch-up products. Its Consumer segment offers specialty products for paint contractors and the DIYers, deck and fence restoration products, metallic and faux finish coatings, exterior wood deck and concrete restoration systems, flooring finishes, and hobby paints and cements; caulk, sealant, adhesive, insulating foam, spackling, glazing, and patch and repair products; and nail enamels, polishes, and coating components. The company was founded in 1947 and is headquartered in Medina, Ohio.

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