Sensient Technologies (NYSE:SXT) and Perimeter Solutions (NYSE:PRM) Critical Survey

Sensient Technologies (NYSE:SXT) and Perimeter Solutions (NYSE:PRM) are both mid-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Valuation & Earnings

This table compares Sensient Technologies and Perimeter Solutions”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	$1.56 billion	2.50	$124.67 million	$3.17	28.90
Perimeter Solutions	$560.97 million	5.72	-$5.91 million	$0.43	50.99

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

Volatility & Risk

Sensient Technologies has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Perimeter Solutions has a beta of 1.98, indicating that its share price is 98% more volatile than the S&P 500.

Profitability

This table compares Sensient Technologies and Perimeter Solutions’ 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%
Perimeter Solutions	13.05%	-1.11%	-0.52%

Analyst Ratings

This is a summary of recent recommendations for Sensient Technologies and Perimeter Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sensient Technologies	0	1	1	0	2.50
Perimeter Solutions	0	0	2	0	3.00

Sensient Technologies currently has a consensus target price of $110.00, suggesting a potential upside of 20.07%. Perimeter Solutions has a consensus target price of $25.00, suggesting a potential upside of 14.03%. Given Sensient Technologies’ higher probable upside, research analysts plainly believe Sensient Technologies is more favorable than Perimeter Solutions.

Insider and Institutional Ownership

90.9% of Sensient Technologies shares are owned by institutional investors. Comparatively, 89.9% of Perimeter Solutions shares are owned by institutional investors. 1.2% of Sensient Technologies shares are owned by insiders. Comparatively, 10.0% of Perimeter Solutions shares are owned by 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.

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 Perimeter Solutions

Perimeter Solutions, SA manufactures and supplies firefighting products and lubricant additives in the United States, Germany, and internationally. It operates in two segments, Fire Safety and Specialty Products. The Fire Safety segment provides fire retardants and firefighting foams, as well as specialized equipment and services for federal, state, provincial, local/municipal, and commercial customers. The Specialty Products segment produces and sells Phosphorus Pentasulfide, which is primarily used in the preparation of lubricant additives, including a family of compounds called Zinc Dialkyldithiophosphates. The company offers its products under the PHOS-CHEK, FIRE-TROL, AUXQUIMIA, and SOLBERG brands. Perimeter Solutions, SA was founded in 1963 and is headquartered in Clayton, Missouri.