Solutia (NYSE: SOA) and Hawkins (NASDAQ:HWKN) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.
Hawkins pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. Solutia does not pay a dividend. Hawkins pays out 28.9% of its earnings in the form of a dividend.
This table compares Solutia and Hawkins’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hawkins||$483.59 million||0.78||$22.55 million||$3.05||11.62|
Hawkins has higher revenue and earnings than Solutia. Solutia is trading at a lower price-to-earnings ratio than Hawkins, indicating that it is currently the more affordable of the two stocks.
This table compares Solutia and Hawkins’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
58.6% of Hawkins shares are owned by institutional investors. 3.7% of Hawkins shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This is a summary of current ratings and target prices for Solutia and Hawkins, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Hawkins beats Solutia on 8 of the 9 factors compared between the two stocks.
Solutia Inc., together with its subsidiaries, is a global manufacturer of performance materials and specialty chemicals used in a range of consumer and industrial applications, including interlayers and aftermarket film for automotive and architectural glass; chemicals that promote safety and durability in tires, and encapsulants, coatings and specialty chemicals used in a variety of electronic, industrial and energy solutions. The Company operates in three segments: Advanced Interlayers; Performance Films; and Technical Specialties. On November 23, 2011, the Company acquired Southwall Technologies Inc. (Southwall). In April 2011, the Company sold its Santoweb and Vocol businesses to Rhein Chemie, a wholly owned subsidiary of LANXESS AG.
Hawkins, Inc. distributes, blends and manufactures chemicals and specialty ingredients for its customers in a range of industries. The Company conducts its business in three segments: Industrial, Water Treatment, and Health and Nutrition. Its Industrial segment is engaged in providing industrial chemicals, products and services to various industries, such as agriculture, chemical processing, electronics and energy. Its Water Treatment segment is engaged in providing chemicals, equipment and solutions for potable water, municipal and industrial wastewater, industrial process water and non-residential swimming pool water. The Health and Nutrition segment is engaged in providing ingredient distribution, processing and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products.
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