Ingevity (NYSE:NGVT) and Element Solutions (NYSE:ESI) Financial Review

Element Solutions (NYSE:ESI) and Ingevity (NYSE:NGVT) are both mid-cap materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, risk, valuation, institutional ownership, earnings and profitability.

Valuation & Earnings

This table compares Element Solutions and Ingevity”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Element Solutions	$2.55 billion	3.11	$190.80 million	$0.85	38.42
Ingevity	$1.13 billion	1.81	-$167.10 million	$1.70	35.77

Element Solutions has higher revenue and earnings than Ingevity. Ingevity is trading at a lower price-to-earnings ratio than Element Solutions, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

92.3% of Element Solutions shares are held by institutional investors. Comparatively, 91.6% of Ingevity shares are held by institutional investors. 6.2% of Element Solutions shares are held by company insiders. Comparatively, 0.9% of Ingevity shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Element Solutions and Ingevity, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Element Solutions	0	2	7	4	3.15
Ingevity	0	3	2	0	2.40

Element Solutions currently has a consensus price target of $46.36, suggesting a potential upside of 41.98%. Ingevity has a consensus price target of $80.00, suggesting a potential upside of 31.55%. Given Element Solutions’ stronger consensus rating and higher probable upside, research analysts plainly believe Element Solutions is more favorable than Ingevity.

Profitability

This table compares Element Solutions and Ingevity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Element Solutions	5.87%	15.45%	7.67%
Ingevity	5.28%	405.38%	11.41%

Risk and Volatility

Element Solutions has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, Ingevity has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500.

Summary

Element Solutions beats Ingevity on 11 of the 15 factors compared between the two stocks.

About Element Solutions

Element Solutions Inc. is a specialty chemicals company that develops and supplies materials used in electronics manufacturing and a range of industrial processes. Its products support the production of printed circuit boards, semiconductors and electronic assemblies, as well as metal plating, surface finishing and other applications. The company’s products help customers treat, protect and enhance surfaces and materials during manufacturing. Its portfolio includes process chemicals, coatings and related technologies sold under established brands, including MacDermid, Alpha and Enthone.

About Ingevity

Ingevity is a specialty chemicals and materials company headquartered in North Charleston, South Carolina. It develops and manufactures high-performance activated carbon and specialty chemical products for industrial and consumer applications. Its activated carbon products are used in vehicle fuel-vapor emission control and other applications. The company also makes specialty chemicals and polymer materials used in areas such as pavement technologies, coatings, adhesives and elastomers. Ingevity serves customers in markets around the world.