Critical Comparison: Ingevity (NYSE:NGVT) versus AdvanSix (NYSE:ASIX)

Ingevity (NYSE:NGVT) and AdvanSix (NYSE:ASIX) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ingevity	-10.55%	207.82%	9.70%
AdvanSix	0.67%	2.18%	1.05%

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ingevity	1	2	2	0	2.20
AdvanSix	1	2	0	0	1.67

Ingevity currently has a consensus target price of $80.00, indicating a potential upside of 4.61%. AdvanSix has a consensus target price of $22.50, indicating a potential upside of 11.24%. Given AdvanSix’s higher probable upside, analysts plainly believe AdvanSix is more favorable than Ingevity.

Institutional and Insider Ownership

91.6% of Ingevity shares are owned by institutional investors. Comparatively, 86.4% of AdvanSix shares are owned by institutional investors. 0.9% of Ingevity shares are owned by insiders. Comparatively, 5.0% of AdvanSix shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Ingevity has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, AdvanSix has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ingevity	$1.18 billion	2.26	-$167.10 million	($3.55)	-21.54
AdvanSix	$1.52 billion	0.36	$49.29 million	$0.37	54.66

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

Summary

AdvanSix beats Ingevity on 8 of the 14 factors compared between the two stocks.

About Ingevity

Ingevity Corporation manufactures and sells activated carbon products, derivative specialty chemicals, and engineered polymers in North America, the Asia Pacific, Europe, the Middle East, Africa, and South America. It operates through three segments: Performance Materials, Performance Chemicals, and Advanced Polymer Technologies. The Performance Materials segment engineers, manufactures, and sells hardwood-based and chemically activated carbon products for use in gasoline vapor emission control systems in cars, motorcycles, trucks, and boats. This segment also produces other activated carbon products for food, water, beverage, and chemical purification applications. The Performance Chemicals segment consists of road technologies and industrial specialties. This segment's products are used in pavement construction, pavement preservation, pavement reconstruction and recycling, road markings, agrochemical dispersants, paper chemicals, and other industrial uses. The Advanced Polymer Technologies segment produces caprolactone and caprolactone-based specialty polymers for use in coatings, resins, elastomers, adhesives, bioplastics, and medical devices. It serves automotive parts and components manufacturers through sales representatives and distributors. The company was formerly known as WestRock Company, Specialty Chemicals Business and changed its name to Ingevity Corporation in September 2015. Ingevity Corporation was founded in 1964 and is headquartered in North Charleston, South Carolina.

About AdvanSix

AdvanSix Inc. engages in the manufacture and sale of polymer resins in the United States and internationally. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam to manufacture polymer resins; ammonium sulfate fertilizers to distributors, farm cooperatives, and retailers; and acetone that are used in the production of adhesives, paints, coatings, solvents, herbicides, and engineered plastic resins, as well as other intermediate chemicals, including phenol, monoisopropylamine, dipropylamine, monoallylamine, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, acetaldehyde oxime, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. The company sells its products directly, as well as through distributors. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.