Albemarle Corporation (NYSE: ALB) and Trecora Resources (NYSE:TREC) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
Albemarle Corporation 31.49% 11.59% 5.42%
Trecora Resources 0.97% 3.94% 2.23%

Insider and Institutional Ownership

84.0% of Albemarle Corporation shares are held by institutional investors. Comparatively, 41.6% of Trecora Resources shares are held by institutional investors. 0.7% of Albemarle Corporation shares are held by company insiders. Comparatively, 6.6% of Trecora Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Albemarle Corporation has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Trecora Resources has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500.

Dividends

Albemarle Corporation pays an annual dividend of $1.28 per share and has a dividend yield of 1.1%. Trecora Resources does not pay a dividend. Albemarle Corporation pays out 16.4% of its earnings in the form of a dividend. Albemarle Corporation has increased its dividend for 13 consecutive years.

Valuation and Earnings

This table compares Albemarle Corporation and Trecora Resources’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Albemarle Corporation $2.81 billion 4.66 $744.58 million $7.80 15.21
Trecora Resources $229.00 million 1.29 $26.34 million $0.09 135.02

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

Analyst Recommendations

This is a summary of current ratings for Albemarle Corporation and Trecora Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Albemarle Corporation 0 4 11 1 2.81
Trecora Resources 0 0 3 0 3.00

Albemarle Corporation currently has a consensus target price of $110.56, suggesting a potential downside of 6.80%. Trecora Resources has a consensus target price of $15.67, suggesting a potential upside of 28.94%. Given Trecora Resources’ stronger consensus rating and higher possible upside, analysts clearly believe Trecora Resources is more favorable than Albemarle Corporation.

Summary

Albemarle Corporation beats Trecora Resources on 13 of the 18 factors compared between the two stocks.

Albemarle Corporation Company Profile

Albemarle Corporation is a global developer, manufacturer and marketer of highly-engineered specialty chemicals. The Company operates through three segments: Lithium and Advanced Materials, Bromine Specialties and Refining Solutions. Lithium and Advanced Materials segment consist of two product categories: Lithium and Performance Catalyst Solutions. The bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. The Company serves various end markets, including petroleum refining, consumer electronics, energy storage, construction, automotive, lubricants, pharmaceuticals, crop protection, food safety and custom chemistry services. As of December 31, 2016, the Company and its joint ventures operated 31 production and research and development (R&D) facilities, as well as a number of administrative and sales offices, around the world.

Trecora Resources Company Profile

Trecora Resources is engaged in manufacturing of specialty petrochemical products and synthetic waxes, and providing custom processing services. The Company operates through two segments: manufacturing of various specialty petrochemical products and manufacturing of 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. TC provides custom manufacturing, distillation, blending, forming, and packaging of finished and intermediate products, and wax products for coatings, hot melt adhesives and lubricants.

Receive News & Stock Ratings for Albemarle Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Albemarle Corporation and related stocks with our FREE daily email newsletter.