Comparing Element Solutions (NYSE:ESI) and Hawkins (NASDAQ:HWKN)

Element Solutions (NYSE:ESI) and Hawkins (NASDAQ:HWKN) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Dividends

Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Hawkins pays an annual dividend of $0.76 per share and has a dividend yield of 0.5%. Element Solutions pays out 51.6% of its earnings in the form of a dividend. Hawkins pays out 19.4% 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. Hawkins has increased its dividend for 20 consecutive years.

Institutional & Insider Ownership

92.3% of Element Solutions shares are owned by institutional investors. Comparatively, 69.7% of Hawkins shares are owned by institutional investors. 6.2% of Element Solutions shares are owned by company insiders. Comparatively, 4.1% of Hawkins shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Element Solutions and Hawkins”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Element Solutions	$2.55 billion	4.06	$190.80 million	$0.62	68.50
Hawkins	$1.08 billion	2.98	$81.55 million	$3.91	39.56

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

Volatility and Risk

Element Solutions has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, Hawkins has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.

Profitability

This table compares Element Solutions and Hawkins’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Element Solutions	5.32%	14.19%	7.30%
Hawkins	7.53%	16.08%	8.35%

Analyst Recommendations

This is a summary of recent recommendations for Element Solutions and Hawkins, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Element Solutions	0	2	6	3	3.09
Hawkins	0	2	2	0	2.50

Element Solutions currently has a consensus price target of $39.57, indicating a potential downside of 6.83%. Hawkins has a consensus price target of $200.00, indicating a potential upside of 29.29%. Given Hawkins’ higher possible upside, analysts plainly believe Hawkins is more favorable than Element Solutions.

Summary

Element Solutions beats Hawkins on 11 of the 18 factors compared between the two stocks.

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.

About Hawkins

Hawkins, Inc. operates as a specialty chemical and ingredients company in the United States. It operates through three segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment offers industrial chemicals, products, and services to agriculture, chemical processing, electronics, energy, food, pharmaceutical, and plating industries. This segment manufactures sodium hypochlorite and agricultural products, as well as various food-grade and pharmaceutical products, such as liquid phosphates, lactates, other blended products, and agricultural products; and receives, stores, and distributes various chemicals comprising liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia, and potassium hydroxide. It also repackages water treatment chemicals and bulk industrial chemicals; and performs custom blending of chemicals. The Water Treatment segment provides chemicals, products, equipment, services, and solutions for potable water, municipal and industrial wastewater, industrial process water, non-residential swimming pool water, and agriculture water. The Health and Nutrition segment offers 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. Its products portfolio includes minerals, vitamins and amino acids, excipients, joint products, botanicals and herbs, sweeteners, and enzymes. Hawkins, Inc. was founded in 1938 and is headquartered in Roseville, Minnesota.