Intrepid Potash (NYSE:IPI) versus Shin-Etsu Chemical (OTCMKTS:SHECY) Critical Review

Shin-Etsu Chemical (OTCMKTS:SHECY) and Intrepid Potash (NYSE:IPI) are both materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Shin-Etsu Chemical and Intrepid Potash’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shin-Etsu Chemical	18.39%	10.49%	8.62%
Intrepid Potash	8.94%	4.74%	3.73%

Analyst Ratings

This is a summary of recent ratings and price targets for Shin-Etsu Chemical and Intrepid Potash, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shin-Etsu Chemical	0	1	0	0	2.00
Intrepid Potash	1	2	0	1	2.25

Intrepid Potash has a consensus price target of $29.00, suggesting a potential downside of 7.08%. Given Intrepid Potash’s stronger consensus rating and higher probable upside, analysts plainly believe Intrepid Potash is more favorable than Shin-Etsu Chemical.

Risk & Volatility

Shin-Etsu Chemical has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500. Comparatively, Intrepid Potash has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Insider & Institutional Ownership

0.0% of Shin-Etsu Chemical shares are held by institutional investors. Comparatively, 56.1% of Intrepid Potash shares are held by institutional investors. 2.3% of Intrepid Potash shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Shin-Etsu Chemical and Intrepid Potash”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shin-Etsu Chemical	$17.10 billion	4.28	$3.15 billion	$0.83	22.23
Intrepid Potash	$298.33 million	1.41	$11.19 million	$1.98	15.76

Shin-Etsu Chemical has higher revenue and earnings than Intrepid Potash. Intrepid Potash is trading at a lower price-to-earnings ratio than Shin-Etsu Chemical, indicating that it is currently the more affordable of the two stocks.

Summary

Shin-Etsu Chemical beats Intrepid Potash on 8 of the 14 factors compared between the two stocks.

About Shin-Etsu Chemical

Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.

About Intrepid Potash

Intrepid Potash, Inc., together with its subsidiaries, engages in the extraction and production of the potash in the United States and internationally. It operates through three segments: Potash, Trio, and Oilfield Solutions. The company offers muriate of potash for various markets, such as agricultural market as a fertilizer input; the industrial market as a component in drilling and fracturing fluids for oil and gas wells, as well as an input to other industrial processes; and the animal feed market as a nutrient supplement. It also provides Trio, a specialty fertilizer that delivers potassium, sulfate, and magnesium in a single particle; water for oil and gas services industry; salt for various markets, including animal feed, industrial applications, pool salt, and the treatment of roads and walkways for ice melting or to manage road conditions; magnesium chloride for use as a road treatment agent for deicing and dedusting; brines for use in oil and gas industry to support well workover and completion activities; and metal recovery salts. Intrepid Potash, Inc. was founded in 1999 and is based in Denver, Colorado.