Comparing DAQO New Energy (NYSE:DQ) & Sensient Technologies (NYSE:SXT)

Sensient Technologies (NYSE:SXT) and DAQO New Energy (NYSE:DQ) are both mid-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Sensient Technologies and DAQO New Energy, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sensient Technologies	0	1	2	0	2.67
DAQO New Energy	1	2	3	1	2.57

Sensient Technologies currently has a consensus price target of $110.00, indicating a potential upside of 18.13%. DAQO New Energy has a consensus price target of $27.04, indicating a potential downside of 19.55%. Given Sensient Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe Sensient Technologies is more favorable than DAQO New Energy.

Valuation and Earnings

This table compares Sensient Technologies and DAQO New Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sensient Technologies	$1.60 billion	2.48	$124.67 million	$3.27	28.48
DAQO New Energy	$639.06 million	3.53	-$345.21 million	($5.14)	-6.54

Sensient Technologies has higher revenue and earnings than DAQO New Energy. DAQO New Energy is trading at a lower price-to-earnings ratio than Sensient Technologies, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Sensient Technologies has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, DAQO New Energy has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Institutional and Insider Ownership

90.9% of Sensient Technologies shares are owned by institutional investors. Comparatively, 47.2% of DAQO New Energy shares are owned by institutional investors. 1.2% of Sensient Technologies shares are owned by company insiders. Comparatively, 24.3% of DAQO New Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Sensient Technologies and DAQO New Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sensient Technologies	8.56%	12.56%	6.60%
DAQO New Energy	-53.74%	-5.89%	-5.42%

Summary

Sensient Technologies beats DAQO New Energy on 10 of the 15 factors compared between the two stocks.

About Sensient Technologies

Sensient Technologies Corporation, together with its subsidiaries, develops, manufactures, and markets colors, flavors, and other specialty ingredients in North America, Europe, Asia, Australia, South America, and Africa. The company offers flavor-delivery systems, and compounded and blended products; ingredient products, such as essential oils, natural and synthetic flavors, and natural extracts; and chili powder, paprika, and chili pepper, as well as dehydrated vegetables comprising parsley, celery, and spinach to the food, beverage, and personal care industries. It also provides natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, including colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications under the Sensient Food Colors, Sensient Pharmaceutical Coating Systems, Sensient Cosmetic Technologies, and Sensient Specialty Markets trade names. Sensient Technologies Corporation was incorporated in 1882 and is headquartered in Milwaukee, Wisconsin.

About DAQO New Energy

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.