Contrasting Resonac (OTCMKTS:SHWDY) and Northern Technologies International (NASDAQ:NTIC)

Resonac (OTCMKTS:SHWDY) and Northern Technologies International (NASDAQ:NTIC) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Earnings & Valuation

This table compares Resonac and Northern Technologies International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Resonac	$9.01 billion	2.13	$194.51 million	$1.23	84.55
Northern Technologies International	$84.24 million	0.90	$20,000.00	($0.08)	-100.25

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

Profitability

This table compares Resonac and Northern Technologies International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Resonac	2.59%	4.89%	1.63%
Northern Technologies International	-0.87%	0.05%	0.04%

Institutional and Insider Ownership

32.9% of Northern Technologies International shares are owned by institutional investors. 24.9% of Northern Technologies International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Resonac pays an annual dividend of $0.55 per share and has a dividend yield of 0.5%. Northern Technologies International pays an annual dividend of $0.04 per share and has a dividend yield of 0.5%. Resonac pays out 44.7% of its earnings in the form of a dividend. Northern Technologies International pays out -50.0% 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.

Analyst Recommendations

This is a summary of current recommendations for Resonac and Northern Technologies International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Resonac	0	0	0	2	4.00
Northern Technologies International	1	1	0	0	1.50

Volatility & Risk

Resonac has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Northern Technologies International has a beta of 0.19, suggesting that its share price is 81% less volatile than the S&P 500.

Summary

Resonac beats Northern Technologies International on 12 of the 15 factors compared between the two stocks.

About Resonac

Resonac Holdings Corporation operates as a chemical company in Japan, China, rest of Asia, and internationally. It operates through Semiconductor and Electronic Materials, Mobility, Innovation Enabling Materials, and Chemicals segments. The company offers gases and solvents, abatement systems and surface treatments, CMP slurries, and anti-charging materials; semiconductor-related materials, display and sensor-related materials, and films; base and photosensitive materials for PWBs; hard disks, SiCs, and optical semiconductors for use as electronic device components; and molded plastics/sheet-formed, powder metal, and aluminum products for automotives. It also provides lithium-ion batteries and mechanical carbon; ceramics, resins, cosmetic ingredients/medicinal additives, monomers, adhesives, tapes, and chromatography products; and elastomers. In addition, the company offers polyimides; HD media; friction materials; aluminum gravity casting products; packaging/containers for food, medicine, and electronics; electrical insulating epoxy resin molded products; zipper bags and tapes; titanium oxide and alumina; and elastic polishing grindstone. Further, it provides polypropylene and polyethylene; liquefied carbon dioxide, dry ice, and gas-related equipment; liquefied oxygen, nitrogen, and argon; molecular sieve; graphite electrodes; plasters, fireproofing pipes, and wall sidings; cement and moisture removal sheets; industrial materials; and FRP, coated sand, and separating mediums. Additionally, the company engages in the contract development and manufacturing of regenerative medicines; leasing of personal computers and other business equipment; outsourcing of salary, welfare, and finance-related business; and synthesis, analysis, and SDS preparation services. The company was formerly known as Showa Denko K.K. and changed its name to Resonac Holdings Corporation in January 2023. Resonac Holdings Corporation was incorporated in 1939 and is headquartered in Tokyo, Japan.

About Northern Technologies International

Northern Technologies International Corporation develops and markets rust and corrosion inhibiting solutions in North America, South America, Europe, Asia, the Middle East and internationally. It offers rust and corrosion inhibiting products, such as plastic and paper packaging, liquids, coatings, rust removers, cleaners, diffusers, and engineered solutions designed for the oil and gas industry under the ZERUST brand. The company provides a portfolio of bio-based and certified compostable polymer resin compounds and finished products under the Natur-Tec brand. In addition, it offers on-site and technical consulting for rust and corrosion prevention issues. It sells its products and services to automotive, electronics, electrical, mechanical, military, retail consumer, and oil and gas markets through direct sales force, network of independent distributors, agents, manufacturer's sales representatives, and strategic partners. The company was founded in 1970 and is headquartered in Circle Pines, Minnesota.