Contrasting ARQ (NASDAQ:ARQ) and Mativ (NYSE:MATV)

ARQ (NASDAQ:ARQ) and Mativ (NYSE:MATV) are both small-cap materials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.

Risk and Volatility

ARQ has a beta of 2.08, meaning that its stock price is 108% more volatile than the S&P 500. Comparatively, Mativ has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Institutional and Insider Ownership

18.5% of ARQ shares are owned by institutional investors. Comparatively, 95.0% of Mativ shares are owned by institutional investors. 20.1% of ARQ shares are owned by company insiders. Comparatively, 1.8% of Mativ shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares ARQ and Mativ”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ARQ	$120.34 million	0.75	-$52.61 million	($1.26)	-1.63
Mativ	$1.99 billion	0.33	-$337.40 million	$1.58	7.48

ARQ has higher earnings, but lower revenue than Mativ. ARQ is trading at a lower price-to-earnings ratio than Mativ, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ARQ and Mativ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ARQ	-42.33%	-2.54%	-1.88%
Mativ	4.50%	13.53%	3.08%

Analyst Recommendations

This is a summary of recent ratings and target prices for ARQ and Mativ, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ARQ	1	1	1	0	2.00
Mativ	0	1	0	0	2.00

ARQ currently has a consensus target price of $5.00, indicating a potential upside of 142.95%. Given ARQ’s higher probable upside, equities analysts clearly believe ARQ is more favorable than Mativ.

Summary

Mativ beats ARQ on 7 of the 13 factors compared between the two stocks.

About ARQ

Arq, Inc. is a holding company. It engages in the provision of environmental and emission control equipment to the power generation industry. The company operates through the following Segments: Refined Coal and Advanced Purification Technologies. The Refined Coal segment includes the Tinuum Group, Tinuum Services, and GWN Manager. The Advanced Purification Technologies segment refers to the sale of Activated Carbon Injection and Dry Sorbent Injection equipment systems, chemical sales, consulting services, and other sales related to the reduction of emissions in the coal-fired electric generation process and the electric utility industry. The company was founded in 1996 and is headquartered in Greenwood Village, CO.

About Mativ

Mativ Holdings, Inc., together with its subsidiaries, manufactures and sells specialty materials in the United States, Europe, the Asia Pacific, the Americas, and internationally. The company operates through two segments, Advanced Technical Materials and Fiber-Based Solutions. The Advanced Technical Materials manufactures and sells various engineered polymer, resin and fiber-based substrates, nets, films, adhesive tapes, and other nonwovens for the filtration, protective solutions, release liners, and healthcare end-markets. This segment sells its products directly, as well as through sales agents and distributors. The Fiber-Based Solutions segment produces packaging and specialty paper products. This segment provides premium packaging products that are used for wine, spirits and beer labels, folding cartons, box wrap, bags, hang tags, and stored value cards servicing retail, cosmetics, spirits, and electronics end-use markets; and premium papers, which are used in commercial printing services, advertising collateral, stationery, corporate identity packages and brochures, direct mail, business cards, and other uses. It also offers branded paper-based products for the consumer channel, such as bright papers, cardstock, stationery paper, envelopes, journals, and planners. This segment distributes its products through authorized paper distributors, converters, retailers, and specialty business converters, as well as directly to end-users. The company was formerly known as Schweitzer-Mauduit International, Inc. and changed its name to Mativ Holdings, Inc. in July 2022. Mativ Holdings, Inc. was incorporated in 1995 and is headquartered in Alpharetta, Georgia.