Head to Head Analysis: Innophos (IPHS) & Trecora Resources (TREC)

Innophos (NASDAQ: IPHS) and Trecora Resources (NYSE:TREC) are both small-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, risk, dividends and earnings.

Valuation and Earnings

This table compares Innophos and Trecora Resources’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Innophos $725.34 million 1.19 $47.97 million $2.17 20.37
Trecora Resources $212.40 million 1.47 $19.42 million $0.13 98.85

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

Volatility & Risk

Innophos has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Trecora Resources has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Innophos and Trecora Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Innophos 0 1 1 0 2.50
Trecora Resources 0 0 3 0 3.00

Innophos presently has a consensus target price of $56.00, indicating a potential upside of 26.67%. Trecora Resources has a consensus target price of $15.33, indicating a potential upside of 19.33%. Given Innophos’ higher possible upside, research analysts plainly believe Innophos is more favorable than Trecora Resources.

Insider and Institutional Ownership

94.5% of Innophos shares are owned by institutional investors. Comparatively, 42.7% of Trecora Resources shares are owned by institutional investors. 2.3% of Innophos shares are owned by insiders. Comparatively, 6.6% of Trecora Resources shares are owned 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.

Profitability

This table compares Innophos and Trecora Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Innophos 6.19% 13.90% 7.26%
Trecora Resources 1.37% 3.74% 2.09%

Dividends

Innophos pays an annual dividend of $1.92 per share and has a dividend yield of 4.3%. Trecora Resources does not pay a dividend. Innophos pays out 88.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Innophos beats Trecora Resources on 9 of the 16 factors compared between the two stocks.

Innophos Company Profile

Innophos Holdings, Inc. is a producer of nutritional specialty ingredients with applications in food, beverage, dietary supplements, pharmaceutical, oral care and industrial end markets. The Company also provides bioactive mineral and nutritional ingredients. The Company’s segments include Specialty Phosphates US & Canada, Specialty Phosphates Mexico, and Granular Triple Super Phosphate (GTSP) & Other. The Company has four principal product lines: Specialty Ingredients; Food and Technical Grade Purified Phosphoric Acid (PPA); Technical Grade Sodium Tripolyphosphate (STPP), & Detergent Grade PPA, and GTSP & Other. The Company’s bioactive mineral ingredients are mineral-based ingredients for food, beverage and dietary supplement end markets that are manufactured to be readily digestible. The Company has its manufacturing facilities located throughout the United States, Canada, Mexico and China.

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.

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