RPM International (NYSE:RPM) and Element Solutions (NYSE:ESI) Financial Survey

RPM International (NYSE:RPM) and Element Solutions (NYSE:ESI) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Insider and Institutional Ownership

81.0% of RPM International shares are owned by institutional investors. Comparatively, 92.3% of Element Solutions shares are owned by institutional investors. 1.6% of RPM International shares are owned by company insiders. Comparatively, 6.2% of Element Solutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

RPM International has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Element Solutions has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Dividends

RPM International pays an annual dividend of $2.16 per share and has a dividend yield of 2.1%. Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. RPM International pays out 41.6% of its earnings in the form of a dividend. Element Solutions pays out 51.6% 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. RPM International has raised its dividend for 51 consecutive years. RPM International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares RPM International and Element Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RPM International	8.63%	22.55%	8.75%
Element Solutions	5.32%	14.19%	7.30%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for RPM International and Element Solutions, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RPM International	0	4	11	0	2.73
Element Solutions	0	2	6	3	3.09

RPM International currently has a consensus target price of $127.42, suggesting a potential upside of 21.35%. Element Solutions has a consensus target price of $39.57, suggesting a potential downside of 0.53%. Given RPM International’s higher possible upside, analysts plainly believe RPM International is more favorable than Element Solutions.

Earnings and Valuation

This table compares RPM International and Element Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RPM International	$7.37 billion	1.82	$688.69 million	$5.19	20.23
Element Solutions	$2.55 billion	3.80	$190.80 million	$0.62	64.16

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

Summary

RPM International beats Element Solutions on 11 of the 18 factors compared between the two stocks.

About RPM International

RPM International Inc. manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. It offers waterproofing, coating, and traditional roofing systems; sealants, air barriers, tapes, and foams; residential home weatherization systems; roofing and building maintenance services; sealing and bonding, subfloor preparation, flooring, and glazing solutions; resin flooring systems, polyurethane, MMA waterproof, epoxy floor paint and coatings, concrete repair, and protection products; fire stopping and intumescent steel coating, and manufacturing industry solutions; rolled asphalt roofing materials and chemical admixtures; concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps, and restoration materials; insulated building cladding materials; and concrete form wall systems. It also provides polymer flooring systems; fiberglass reinforced plastic gratings and shapes; corrosion-control coating, containment and railcar lining, fire and sound proofing, and heat and cryogenic insulation products; specialty construction products; amine curing agents, reactive diluents, and epoxy resins; fluorescent colorants and pigments; shellac-based-specialty and marine coatings; fire and water damage restoration, carpet cleaning, and disinfecting products; fuel additives; wood treatments, coatings, and touch-up products; and nail enamels, polishes, and coating components. In addition, it offers solutions for the paint contractors and DIYers, concrete restoration and flooring, metallic and faux finish coatings, cleaners, and hobby paints and cements; and caulks, adhesives, insulating foams, and patches, as well as spackling, glazing, and repair products. The company was incorporated in 1947 and is headquartered in Medina, Ohio.

About Element Solutions

Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies surface mount technologies, fluxes, thermal management material, coatings, and other attachment materials; chemical formulations to the electronics industry; and advanced copper interconnects, die attachment, sintered silver material, adhesives, wafer bump processes, and photomask technologies for semiconductor industry. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.