Comparing Elementis (OTCMKTS:ELMTY) and DAQO New Energy (NYSE:DQ)

DAQO New Energy (NYSE:DQ) and Elementis (OTCMKTS:ELMTY) are both small-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Volatility & Risk

DAQO New Energy has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Elementis has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500.

Profitability

This table compares DAQO New Energy and Elementis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DAQO New Energy	-53.74%	-5.89%	-5.42%
Elementis	N/A	N/A	N/A

Institutional & Insider Ownership

47.2% of DAQO New Energy shares are held by institutional investors. 24.3% of DAQO New Energy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for DAQO New Energy and Elementis, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DAQO New Energy	1	2	3	1	2.57
Elementis	0	0	0	0	0.00

DAQO New Energy presently has a consensus target price of $27.04, suggesting a potential downside of 4.23%. Given DAQO New Energy’s stronger consensus rating and higher possible upside, equities analysts clearly believe DAQO New Energy is more favorable than Elementis.

Valuation & Earnings

This table compares DAQO New Energy and Elementis”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DAQO New Energy	$639.06 million	2.96	-$345.21 million	($5.14)	-5.49
Elementis	$738.30 million	1.62	-$47.80 million	N/A	N/A

Elementis has higher revenue and earnings than DAQO New Energy.

Summary

DAQO New Energy beats Elementis on 8 of the 13 factors compared between the two stocks.

About DAQO New Energy

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.

About Elementis

Elementis plc operates as a specialty chemical company in the United Kingdom, rest of Europe, North America, and internationally. It operates in two segments, Performance Specialties and Personal Care. The Performance Specialties segment engages in the production of rheological modifiers and additives for decorative and industrial coatings; and production and supply of talc for use in plastics, coatings, technical ceramics, and paper sectors. The Personal Care segment provides rheological modifiers and compounded products, including active ingredients for antiperspirants (AP) deodorants for personal care manufacturers. The company offers personal care products for antiperspirants, color cosmetics, and skin care applications; and performance specialties products for architectural coatings, adhesives, sealants and construction additives, and talc applications. Elementis plc was founded in 1844 and is headquartered in London, the United Kingdom.