Reviewing Covestro (OTCMKTS:COVTY) and Tredegar (NYSE:TG)

Covestro (OTCMKTS:COVTY) and Tredegar (NYSE:TG) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Earnings & Valuation

This table compares Covestro and Tredegar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Covestro	$15.34 billion	0.87	-$287.84 million	($1.10)	-32.18
Tredegar	$598.03 million	0.51	-$64.57 million	($1.68)	-5.23

Tredegar has lower revenue, but higher earnings than Covestro. Covestro is trading at a lower price-to-earnings ratio than Tredegar, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Covestro has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Tredegar has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Covestro and Tredegar, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Covestro	0	2	0	0	2.00
Tredegar	0	0	0	0	0.00

Profitability

This table compares Covestro and Tredegar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Covestro	-2.74%	-5.84%	-2.78%
Tredegar	-8.35%	9.28%	3.95%

Institutional & Insider Ownership

79.2% of Tredegar shares are owned by institutional investors. 6.0% of Tredegar shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

About Covestro

Covestro AG supplies high-tech polymer materials and application solutions. It operates in two segments, Performance Materials, and Solutions & Specialties. The Performance Materials segment develops, produces, and supplies high-performance materials, such as polyurethanes and polycarbonates, and base chemicals, which include diphenylmethane diisocyanate (MDI), toluylene diisocyanate, long-chain polyols, and polycarbonate resins for use in furniture and wood processing, construction, automotive, and transportation industries, as well as roof structures, insulation for buildings and refrigerators, mattresses, car seats, and other applications. The Solutions & Specialties segment comprises a range of polymer products, including polycarbonates, precursors for coatings and adhesives, MDI specialties and polyols, thermoplastic polyurethanes, specialty films, and elastomers that are used in automotive and transportation, electrical, electronics and household appliances, construction, and healthcare industries, as well as composite resins for solar panel frames, laptops, floodlights, and electric vehicle batteries. The company markets its products through trading houses and distributors. It operates in Europe, the Middle East, Africa, Latin America, the United States, Canada, and the People's Republic of China. The company was founded in 1863 and is headquartered in Leverkusen, Germany.

About Tredegar

Tredegar Corporation manufactures and sells aluminum extrusions, polyethylene (PE) films, and plastic and polyester films in the United States and internationally. It operates through three segments: Aluminum Extrusions, PE Films, and Flexible Packaging Films. The Aluminum Extrusions segment produces soft and medium strength alloyed aluminum extrusions, custom fabricated and finished aluminum extrusions for the building and construction, automotive and transportation, consumer durables, machinery and equipment, electrical and renewable energy, and distribution markets; and manufactures mill, anodized, and painted and alloyed aluminum extrusions to fabricators and distributors. The PE Films segment offers single- and multi-layer surface protection films for protecting components of flat panel and flexible displays that are used in televisions, monitors, notebooks, smart phones, tablets, e-readers, and digital signage under the UltraMask, ForceField, ForceField PEARL, Pearl A, and Obsidian brands. This segment provides polyethylene overwrap for bathroom tissue and paper towels, as well as polyethylene overwrap films and films for other markets. The Flexible Packaging Films segment offers polyester-based films for food packaging and industrial applications under the Ecophane and Sealphane brands. Tredegar Corporation was incorporated in 1988 and is headquartered in Richmond, Virginia.