Many manufacturing industries use specialty chemicals, such as textiles, oil and gas, ink additives, construction, food, and cosmetics. Moreover, the U.S. specialty chemical market size is projected to grow significantly, reaching an estimated value of $152.36 billion by 2032, driven by expanding demand for construction chemicals on account of an increase in investments in infrastructure projects.

Increased research and development of specialty chemical products with advanced and optimum features is the major factor that drives the market growth. Increasing demand from ASEAN countries such as China and India due to rapid industrialization has uplifted the specialty chemicals market growth.

Against this backdrop, let’s compare two specialty chemicals stocks to analyze which stock one should invest in: Innospec Inc. (IOSP) and Ashland Inc. (ASH).

The Case for Innospec Inc. Stock

With a $2.66 billion market cap, Innospec Inc. (IOSP) develops, manufactures, blends, markets, and supplies specialty chemicals in the United States, the rest of North America, the United Kingdom, the rest of Europe, and internationally.

IOSP’s stock has gained marginally intraday to close the last trading session at $106.62.

IOSP’s 1.10x trailing-12-month asset turnover ratio is 66.5% higher than the 0.66x industry average. Also, its 8% trailing-12-month Return on Total Assets is 234.2% higher than the 2.39% industry average.

IOSP’s net sales for the third quarter, which ended on September 30, 2024, were reported at $443.40 million. In addition, the company’s net income was $33.40 million, or $1.33 per share. Its adjusted EBITDA stood at $50.50 million.

For the second quarter ending June 2025, IOSP’s revenue is expected to increase 5.7% year-over-year to $459.80 million. Its EPS for the ongoing quarter is expected to be $1.47. Moreover, the company surpassed EPS estimates in all the trailing four quarters, which is impressive.

IOSP’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

The stock has a B grade for Stability, Quality, and Sentiment. IOSP is ranked #9 out of 81 stocks in the B-rated Chemicals industry.

In addition to the POWR Ratings I’ve just highlighted, you can see IOSP’s ratings for Momentum, Growth, and Value here.

The Case for Ashland Inc. Stock

Valued at $3.32 billion by market cap, Ashland Inc. (ASH) engages in the provision of dating products. Its portfolio of brands includes Tinder, Hinge, Match, Meetic, OkCupid, Pairs, Plenty of Fish, Azar, BLK, and Hakuna, as well as various other brands, each built to increase users’ likelihood of connecting with others. 

Shares of ASH have declined 16% over the three months to close the last trading session at $70.35.

In terms of the trailing-12-month CAPEX/Sales, ASH’s 6.48% is 15.3% lower than the 7.66% industry average. However, its 32.42% trailing-12-month gross profit margin is 11.1% higher than the 52.25% industry average.

ASH’s sales increased 1% year-over-year to $522 million for the fiscal 2024 third quarter that ended September 30, 2024. Moreover, the company’s income from continuing operations came in at $19 million and $0.39 per share.

For the second quarter ending March 2025, ASH’s EPS is expected to increase marginally year-over-year to $1.27. Its revenue for the same quarter is expected to decrease 9.5% year-over-year to $520.43 million. However, the company surpassed EPS estimates in three of the trailing four quarters.

ASH’s fundamentals are reflected in its POWR Ratings. The stock has an overall C rating, translating to Neutral in our proprietary rating system.

ASH has a C grade for Growth, Value, and Stability. It is ranked #49 in the same industry.

Click here for the additional POWR Ratings for ASH (Momentum, Sentiment, and Quality).

Innospec vs. Ashland: Which Specialty Chemicals Stock Should You Invest In?

The specialty chemical market is a diverse and dynamic sector encompassing a wide range of industries and applications.  With advancements in process technology, the market continues to evolve to meet the growing demands of industries such as electronics, textiles, and construction.

Leading specialty chemical companies IOSP and ASH stand to capitalize on the optimistic industry outlook. However, IOSP’s strong profitability might make it the better chemical stock pick.

Our research shows that the odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the Chemicals industry here.

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ASH shares were trading at $70.35 per share on Thursday afternoon, down $0.90 (-1.26%). Year-to-date, ASH has declined -1.55%, versus a 0.58% rise in the benchmark S&P 500 index during the same period.

About the Author: Nidhi Agarwal

Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities. More...

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