Element Solutions (NYSE:ESI) versus AdvanSix (NYSE:ASIX) Financial Contrast
by Kim Johansen · The Markets DailyAdvanSix (NYSE:ASIX – Get Free Report) and Element Solutions (NYSE:ESI – Get Free Report) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, dividends, valuation, institutional ownership and profitability.
Dividends
AdvanSix pays an annual dividend of $0.64 per share and has a dividend yield of 3.7%. Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. AdvanSix pays out 33.3% of its earnings in the form of a dividend. Element Solutions pays out 32.3% 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. AdvanSix has raised its dividend for 2 consecutive years. AdvanSix is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares AdvanSix and Element Solutions”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AdvanSix | $1.52 billion | 0.31 | $44.15 million | $1.92 | 9.03 |
| Element Solutions | $2.46 billion | 2.46 | $244.20 million | $0.99 | 25.27 |
Element Solutions has higher revenue and earnings than AdvanSix. AdvanSix 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 and Institutional Ownership
86.4% of AdvanSix shares are owned by institutional investors. Comparatively, 92.3% of Element Solutions shares are owned by institutional investors. 5.6% of AdvanSix shares are owned by company insiders. Comparatively, 6.9% of Element Solutions shares are owned 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.
Profitability
This table compares AdvanSix and Element Solutions’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AdvanSix | 3.52% | 7.14% | 3.50% |
| Element Solutions | 9.58% | 14.01% | 7.28% |
Analyst Recommendations
This is a summary of recent ratings and recommmendations for AdvanSix and Element Solutions, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AdvanSix | 1 | 0 | 1 | 0 | 2.00 |
| Element Solutions | 0 | 3 | 6 | 2 | 2.91 |
AdvanSix presently has a consensus price target of $33.50, suggesting a potential upside of 93.19%. Element Solutions has a consensus price target of $30.75, suggesting a potential upside of 22.90%. Given AdvanSix’s higher probable upside, analysts clearly believe AdvanSix is more favorable than Element Solutions.
Volatility & Risk
AdvanSix has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500. Comparatively, Element Solutions has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.
Summary
Element Solutions beats AdvanSix on 13 of the 18 factors compared between the two stocks.
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.
About Element Solutions
Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies surface mount technologies, fluxes, thermal management material, coatings, and other attachment materials; chemical formulations to the electronics industry; and advanced copper interconnects, die attachment, sintered silver material, adhesives, wafer bump processes, and photomask technologies for semiconductor industry. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.