Critical Contrast: Olin (NYSE:OLN) versus Trinseo (NYSE:TSE)

Trinseo (NYSE:TSE) and Olin (NYSE:OLN) are both small-cap materials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Trinseo and Olin, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinseo	1	2	0	0	1.67
Olin	4	10	1	1	1.94

Trinseo presently has a consensus price target of $1.00, suggesting a potential upside of 334.78%. Olin has a consensus price target of $22.62, suggesting a potential upside of 31.71%. Given Trinseo’s higher probable upside, equities research analysts plainly believe Trinseo is more favorable than Olin.

Dividends

Trinseo pays an annual dividend of $0.04 per share and has a dividend yield of 17.4%. Olin pays an annual dividend of $0.80 per share and has a dividend yield of 4.7%. Trinseo pays out -0.3% of its earnings in the form of a dividend. Olin pays out -65.0% 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. Trinseo has raised its dividend for 1 consecutive years. Trinseo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Trinseo has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500. Comparatively, Olin has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Institutional and Insider Ownership

82.7% of Trinseo shares are held by institutional investors. Comparatively, 88.7% of Olin shares are held by institutional investors. 4.5% of Trinseo shares are held by company insiders. Comparatively, 1.6% of Olin shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Trinseo and Olin”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinseo	$3.13 billion	0.00	-$348.50 million	($11.55)	-0.02
Olin	$6.78 billion	0.29	-$100.50 million	($1.23)	-13.96

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

Profitability

This table compares Trinseo and Olin’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trinseo	-13.15%	N/A	-11.72%
Olin	-2.08%	-4.76%	-1.17%

Summary

Olin beats Trinseo on 11 of the 18 factors compared between the two stocks.

About Trinseo

Trinseo PLC operates as a specialty material solutions provider in the United States, Europe, the Asia-Pacific, and internationally. It operates through five segments: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics. The Engineered Materials segment offers rigid thermoplastic compounds and blends, soft thermoplastic, continuous cast, cell cast, activated methyl methacrylates (MMA), PMMA resins, and extruded PMMA sheets and resins for consumer electronics, medical, footwear, automotive, and building and construction applications under the EMERGE, CALIBRE, PLEXIGLAS, ALTUGLAS, ACRYSPA, AVONITE, STUDIO, MEGOL, APILON, APIGO, and APINAT brands. The Latex Binders segment provides styrene-butadiene latex, and other latex polymers and binders primarily for coated paper and packaging board, carpet, and artificial turf backings, as well as the adhesive, building and construction, and technical textile paper market. The Plastics Solutions segment offers acrylonitrile-butadiene-styrene, styrene-acrylonitrile, polycarbonate, and compounds and blends for automotive and other applications under the MAGNUM brand. The Polystyrene segment provides general purpose polystyrenes and high impact polystyrene for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials under the STYRON brand. The Americas Styrenics segment provides styrene and polystyrene for appliances, food packaging, food service disposables, consumer electronics, and building and construction materials applications. Trinseo PLC was incorporated in 2015 and is headquartered in Wayne, Pennsylvania.

About Olin

Olin Corporation manufactures and distributes chemical products in the United States, Europe, Asia Pacific, Latin America, and Canada. It operates through three segments: Chlor Alkali Products and Vinyls; Epoxy; and Winchester. The Chlor Alkali Products and Vinyls segment offers chlorine and caustic soda, ethylene dichloride and vinyl chloride monomers, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products, potassium hydroxide, and chlorinated organics intermediates and solvents. The Epoxy segment provides Allylics, such as allyl chloride, epichlorohydrin, and glycerin; aromatics, including acetone, bisphenol, cumene, and phenol; liquid and solid epoxy resins; and converted epoxy resins and additives. The Winchester segment offers sporting ammunition products, including shotshells, small caliber centerfire, and rimfire ammunition products for hunters and recreational shooters, and law enforcement agencies; small caliber military ammunition products for use in infantry and mounted weapons; and industrial products comprising gauge loads and powder-actuated tool loads for maintenance applications in power and concrete industries, and powder-actuated tools in construction industry. The company markets its products through its sales force, as well as directly to various industrial customers, mass merchants, retailers, wholesalers, gun clubs, other distributors, and the U.S. Government and its prime contractors. Olin Corporation was incorporated in 1892 and is based in Clayton, Missouri.