Reviewing FUCHS (OTCMKTS:FUPBY) and DAQO New Energy (NYSE:DQ)

DAQO New Energy (NYSE:DQ) and FUCHS (OTCMKTS:FUPBY) are both mid-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their risk, earnings, institutional ownership, dividends, analyst recommendations, valuation and profitability.

Volatility and Risk

DAQO New Energy has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, FUCHS has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500.

Insider and Institutional Ownership

47.2% of DAQO New Energy shares are held by institutional investors. 24.3% of DAQO New Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares DAQO New Energy and FUCHS”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DAQO New Energy	$639.06 million	3.53	-$345.21 million	($5.14)	-6.54
FUCHS	$3.81 billion	1.63	$326.79 million	$0.63	17.76

FUCHS has higher revenue and earnings than DAQO New Energy. DAQO New Energy is trading at a lower price-to-earnings ratio than FUCHS, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for DAQO New Energy and FUCHS, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DAQO New Energy	1	2	3	1	2.57
FUCHS	1	0	0	0	1.00

DAQO New Energy currently has a consensus price target of $27.04, indicating a potential downside of 19.55%. Given DAQO New Energy’s stronger consensus rating and higher probable upside, equities research analysts plainly believe DAQO New Energy is more favorable than FUCHS.

Profitability

This table compares DAQO New Energy and FUCHS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DAQO New Energy	-53.74%	-5.89%	-5.42%
FUCHS	8.16%	15.56%	11.09%

Summary

FUCHS beats DAQO New Energy on 8 of the 15 factors compared between the two stocks.

About DAQO New Energy

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.

About FUCHS

Fuchs SE develops, produces, and sells lubricants and related specialties in Europe, the Middle East, Africa, the Asia Pacific, and North and South America. The company offers automotive lubricants, such as biodegradable lubricants, central and mobile hydraulic oils, dry coatings, engine and gear oils, motorcycle/two wheelers, and service fluids, as well as various oils for agriculture sector. It also provides industrial lubricants, including chain lubricants, dry coatings, gear and hydraulic oils, machine oils, open gear lubricants, rapidly biodegradable lubricants, compressor and refrigeration oils, release agents, slideways oils, fluids and industrial oils, textile machine oils, and turbine oils. In addition, the company offers lubricating greases comprising assembly pastes, biodegradable greases, food grade greases, multi-purpose/long-life greases, pastes for extreme temperatures, perfluorinated pastes, and wheel bearing greases, as well as gear boxes, and greases for central lubricating system, extreme temperature, machine tools, plain and roller bearings, rail vehicles, spray cans or rattle cans, and solid lubricants. Further, it provides metal processing lubricants consisting of cleaners, corrosion preventives, cutting and grinding, forming lubricants, and quenching oils; and special application lubricants for application equipment, chain lubrication, dry coatings, food and beverage, gears, sugar processing, railway traffic, plain and roller bearings, glass manufacturing process, hot forming, maintenance, open gears, pastes, release agents, other specialties, special greases, and wind power plants. Additionally, the company offers open gear and surface coating services. The company was formerly known as Fuchs Petrolub SE and changed its name to Fuchs SE in July 2023. Fuchs SE was founded in 1931 and is headquartered in Mannheim, Germany.