Hawkins (NASDAQ:HWKN – Get Free Report) and Shin-Etsu Chemical (OTCMKTS:SHECY – Get Free Report) are both materials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.
Institutional & Insider Ownership
69.7% of Hawkins shares are held by institutional investors. Comparatively, 0.0% of Shin-Etsu Chemical shares are held by institutional investors. 3.7% of Hawkins shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares Hawkins and Shin-Etsu Chemical’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hawkins | 7.53% | 15.97% | 8.68% |
| Shin-Etsu Chemical | 18.57% | 10.90% | 8.97% |
Dividends
Hawkins pays an annual dividend of $0.80 per share and has a dividend yield of 0.5%. Shin-Etsu Chemical pays an annual dividend of $0.19 per share and has a dividend yield of 1.1%. Hawkins pays out 19.4% of its earnings in the form of a dividend. Shin-Etsu Chemical pays out 22.1% 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. Hawkins has increased its dividend for 20 consecutive years.
Risk & Volatility
Hawkins has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Shin-Etsu Chemical has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500.
Valuation and Earnings
This table compares Hawkins and Shin-Etsu Chemical”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hawkins | $1.08 billion | 2.90 | $81.55 million | $4.12 | 36.64 |
| Shin-Etsu Chemical | $17.10 billion | 3.93 | $3.15 billion | $0.86 | 19.70 |
Shin-Etsu Chemical has higher revenue and earnings than Hawkins. Shin-Etsu Chemical is trading at a lower price-to-earnings ratio than Hawkins, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Hawkins and Shin-Etsu Chemical, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hawkins | 0 | 3 | 1 | 0 | 2.25 |
| Shin-Etsu Chemical | 0 | 1 | 0 | 0 | 2.00 |
Hawkins currently has a consensus price target of $178.50, suggesting a potential upside of 18.25%. Given Hawkins’ stronger consensus rating and higher probable upside, research analysts clearly believe Hawkins is more favorable than Shin-Etsu Chemical.
Summary
Hawkins beats Shin-Etsu Chemical on 10 of the 17 factors compared between the two stocks.
About Hawkins
Hawkins, Inc. operates as a specialty chemical and ingredients company in the United States. It operates through three segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment offers industrial chemicals, products, and services to agriculture, chemical processing, electronics, energy, food, pharmaceutical, and plating industries. This segment manufactures sodium hypochlorite and agricultural products, as well as various food-grade and pharmaceutical products, such as liquid phosphates, lactates, other blended products, and agricultural products; and receives, stores, and distributes various chemicals comprising liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia, and potassium hydroxide. It also repackages water treatment chemicals and bulk industrial chemicals; and performs custom blending of chemicals. The Water Treatment segment provides chemicals, products, equipment, services, and solutions for potable water, municipal and industrial wastewater, industrial process water, non-residential swimming pool water, and agriculture water. The Health and Nutrition segment offers ingredient distribution, processing, and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products. Its products portfolio includes minerals, vitamins and amino acids, excipients, joint products, botanicals and herbs, sweeteners, and enzymes. Hawkins, Inc. was founded in 1938 and is headquartered in Roseville, Minnesota.
About Shin-Etsu Chemical
Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.
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