DowDuPont (NYSE: DWDP) and Trinseo (NYSE:TSE) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Profitability

This table compares DowDuPont and Trinseo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DowDuPont 2.37% 8.01% 4.08%
Trinseo 7.42% 59.08% 13.86%

Institutional and Insider Ownership

69.6% of DowDuPont shares are owned by institutional investors. Comparatively, 97.1% of Trinseo shares are owned by institutional investors. 0.4% of DowDuPont shares are owned by company insiders. Comparatively, 1.0% of Trinseo shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

DowDuPont pays an annual dividend of $1.52 per share and has a dividend yield of 2.2%. Trinseo pays an annual dividend of $1.44 per share and has a dividend yield of 1.9%. DowDuPont pays out 44.7% of its earnings in the form of a dividend. Trinseo pays out 17.7% 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.

Earnings and Valuation

This table compares DowDuPont and Trinseo’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DowDuPont $62.48 billion 2.56 $1.46 billion $3.40 20.17
Trinseo $4.45 billion 0.73 $328.30 million $8.13 9.23

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

Risk and Volatility

DowDuPont has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500. Comparatively, Trinseo has a beta of 2.27, suggesting that its stock price is 127% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for DowDuPont and Trinseo, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DowDuPont 0 4 22 0 2.85
Trinseo 0 2 4 0 2.67

DowDuPont currently has a consensus target price of $80.95, suggesting a potential upside of 18.03%. Trinseo has a consensus target price of $88.60, suggesting a potential upside of 18.05%. Given Trinseo’s higher possible upside, analysts plainly believe Trinseo is more favorable than DowDuPont.

Summary

Trinseo beats DowDuPont on 9 of the 16 factors compared between the two stocks.

About DowDuPont

DowDuPont Inc., through its subsidiaries, engages in agriculture, materials science, and specialty products businesses worldwide. The company's Agriculture segment develops and sells hybrid corn seed and soybean seed varieties; canola, cotton, sunflower, sorghum, wheat, and rice seeds; silage inoculants; and weed control, disease control, and insect control products. Its Performance Materials & Coatings segment manufactures and sells architectural paints and coatings, and industrial coatings; performance monomers and silicones; and standalone silicone and acrylic-based materials. The company's Industrial Intermediates & Infrastructure segment offers cellulose ethers, redispersible latex powders, silicones, and acrylic emulsions; energy solutions; propylene oxide and propylene glycol, polyether polyols and aromatic isocyanates, and formulated polyurethane systems; and caustic soda, and ethylene dichloride and vinyl chloride monomer products. Its Packaging & Specialty Plastics segment provides ethylene, and propylene and aromatic products; and polyolefin elastomers and ethylene propylene diene monomer elastomers. The company's Electronics & Imaging segment offers materials and systems for mobile devices, television monitors, personal computers, and electronics. Its Nutrition & Biosciences segment provides specialty food ingredients, as well as cellulosic- and alginates-based pharma excipients; and enzymes, biomaterials, biocides, and antimicrobial solutions and process technology. The company's Transportation & Advanced Polymers segment offers engineering resins, adhesives, lubricants, and parts for transportation, electronics, medical, industrial, and consumer end-markets. Its Safety & Construction segment provides engineered products and integrated systems for construction, worker safety, energy, oil and gas, transportation, medical device, and water purification and separation industries. The company was founded in 1897 and is headquartered in Midland, Michigan.

About Trinseo

Trinseo S.A., a materials company, manufactures and markets synthetic rubber, latex binders, and plastic products in Europe, the United States, the Asia Pacific, and internationally. The company operates through Latex Binders, Synthetic Rubber, Performance Plastics, Basic Plastics, Feedstocks, and Americas Styrenics segments. The Latex Binders segment offers styrene-butadiene, styrene-acrylate, vinylidene chloride, and butadiene-methacrylate latex products for the commercial and niche carpet markets, as well as performance latex products for the adhesive, building and construction, and technical textile paper markets. The Synthetic Rubber segment provides styrene-butadiene rubber, emulsion styrene-butadiene rubber, nickel polybutadiene rubber, and neodymium polybutadiene rubber for use in tires, modifiers, and technical rubber products. The Performance Plastics segment offers engineered compounds and blend products for the automotive, consumer electronics, medical, electrical, and lighting markets. The Basic Plastics segment provides polystyrene, polycarbonate, acrylonitrile-butadiene-styrene, and styrene-acrylonitrile for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials. The Feedstocks segment offers styrene monomer, a basic building block of plastics. The Americas Styrenics segment provides styrene and polystyrene, as well as general purpose polystyrenes, high heat, high impact resin, and STYRON A-TECH polystyrene products. The company's products are also used in carpet and artificial turf backing, coated and specialty paper, and other markets. Trinseo S.A. was founded in 2010 and is headquartered in Berwyn, Pennsylvania.

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