Critical Review: Trecora Resources (TREC) and Ingevity Corp (NGVT)

Trecora Resources (NYSE: TREC) and Ingevity Corp (NASDAQ:NGVT) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Profitability

This table compares Trecora Resources and Ingevity Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trecora Resources 0.97% 3.94% 2.23%
Ingevity Corp 13.75% 76.78% 16.55%

Institutional and Insider Ownership

41.6% of Trecora Resources shares are held by institutional investors. 6.6% of Trecora Resources shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Trecora Resources and Ingevity Corp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trecora Resources 0 0 3 0 3.00
Ingevity Corp 0 0 5 0 3.00

Trecora Resources presently has a consensus price target of $15.67, indicating a potential upside of 27.37%. Ingevity Corp has a consensus price target of $69.20, indicating a potential downside of 0.65%. Given Trecora Resources’ higher possible upside, equities analysts clearly believe Trecora Resources is more favorable than Ingevity Corp.

Valuation and Earnings

This table compares Trecora Resources and Ingevity Corp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Trecora Resources $229.00 million 1.31 $26.34 million $0.09 136.68
Ingevity Corp $942.10 million 3.12 $216.90 million N/A N/A

Ingevity Corp has higher revenue and earnings than Trecora Resources.

Summary

Ingevity Corp beats Trecora Resources on 7 of the 11 factors compared between the two stocks.

Trecora Resources Company Profile

Trecora Resources (TREC) is a provider of high-purity specialty hydrocarbons and waxes. TREC owns and operates a facility located in southeast Texas, just north of Beaumont, which specializes in high-purity hydrocarbons and other petrochemical manufacturing. The Company operates through two segments: specialty petrochemical products and specialty synthetic waxes. The specialty petrochemical products segment operates through South Hampton Resources, Inc. (SHR). The specialty synthetic wax segment operates through Trecora Chemical, Inc. (TC). SHR owns and operates a specialty petrochemical facility that produces hydrocarbons and other petroleum-based products, including isopentane, normal pentane, isohexane and hexane. TC produces specialty polyethylene and poly alpha olefin waxes, and provides custom processing services. In addition, the Company is the 33.4% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company.

Ingevity Corp Company Profile

Ingevity Corporation is a manufacturer of specialty chemicals and high performance carbon materials. The Company is also a manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. The Company operates through two segments: Performance Materials and Performance Chemicals. The Performance Materials segment primarily produces automotive carbon products used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. The Performance Chemicals segment develops, manufactures and sells a range of specialty chemicals primarily derived from co-products of the Kraft pulping process. Its products are used in a range of applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks and automotive components that reduce gasoline vapor emissions.

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