Ferro (NYSE: FOE) and Trinseo (NYSE:TSE) are both mid-cap basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.
Trinseo pays an annual dividend of $1.44 per share and has a dividend yield of 1.9%. Ferro does not pay a dividend. Trinseo pays out 22.6% of its earnings in the form of a dividend.
97.3% of Ferro shares are owned by institutional investors. Comparatively, 96.9% of Trinseo shares are owned by institutional investors. 2.0% of Ferro shares are owned by insiders. Comparatively, 0.3% of Trinseo shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This is a breakdown of current recommendations for Ferro and Trinseo, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ferro currently has a consensus target price of $23.00, suggesting a potential downside of 6.47%. Trinseo has a consensus target price of $76.25, suggesting a potential downside of 0.97%. Given Trinseo’s higher possible upside, analysts plainly believe Trinseo is more favorable than Ferro.
This table compares Ferro and Trinseo’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Ferro has a beta of 1.94, indicating that its share price is 94% more volatile than the S&P 500. Comparatively, Trinseo has a beta of 2.32, indicating that its share price is 132% more volatile than the S&P 500.
Valuation and Earnings
This table compares Ferro and Trinseo’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Ferro||$1.15 billion||1.80||-$20.81 million||$0.52||47.29|
|Trinseo||$3.72 billion||0.91||$318.31 million||$6.38||12.07|
Trinseo has higher revenue and earnings than Ferro. Trinseo is trading at a lower price-to-earnings ratio than Ferro, indicating that it is currently the more affordable of the two stocks.
Trinseo beats Ferro on 9 of the 16 factors compared between the two stocks.
Ferro Corporation (Ferro) produces specialty materials that are sold to a range of manufacturers. The Company’s segments include Performance Coatings (metal and ceramic coatings), Performance Colors and Glass (glass coatings), and Color Solutions. Its Performance Coatings segment includes Tile Coating Systems and Porcelain Enamel. Its manufacturers make products for various end-use markets. The Company’s products fall into two general categories: functional coatings, which perform specific functions in the manufacturing processes and end products of its customers, and color solutions, which provide aesthetic and performance characteristics to its customers’ products. Its products are used in a range of product applications in markets, including appliances, automobiles, building and renovation, electronics, household furnishings, industrial products and packaging.
Trinseo S.A. is a materials company engaged in the manufacture and marketing of synthetic rubber, latex and plastics. The Company’s segments include Latex Binders, Synthetic Rubber, Performance Plastics, Basic Plastics, Feedstocks and Americas Styrenics. The Latex Binders segment produces styrene-butadiene latex (SB latex) and other latex polymers and binders. The Synthetic Rubber segment produces synthetic rubber products used in tires, impact modifiers and technical rubber products. The Performance Plastics segment produces compounds and blends and specialized acrylonitrile-butadiene-styrene (ABS) grades. The Basic Plastics segment produces styrenic polymers, including polystyrene, basic ABS, and styrene-acrylonitrile (SAN) products, as well as polycarbonate (PC). The Feedstocks segment includes its production and procurement of styrene monomer outside of North America. The Americas Styrenics segment consists of the operations of its joint venture, Americas Styrenics LLC.
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