Comparing Ashland (NYSE:ASH) & Toray Industries (OTCMKTS:TRYIY)

Ashland (NYSE:ASH) and Toray Industries (OTCMKTS:TRYIY) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, valuation, analyst recommendations, profitability, institutional ownership and risk.

Analyst Ratings

This is a breakdown of current ratings and price targets for Ashland and Toray Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ashland	0	3	2	0	2.40
Toray Industries	0	2	0	0	2.00

Ashland currently has a consensus target price of $65.60, indicating a potential upside of 16.24%. Given Ashland’s stronger consensus rating and higher probable upside, equities analysts clearly believe Ashland is more favorable than Toray Industries.

Valuation and Earnings

This table compares Ashland and Toray Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ashland	$2.11 billion	1.22	$169.00 million	($18.73)	-3.01
Toray Industries	$16.83 billion	0.64	$514.21 million	$0.58	23.14

Toray Industries has higher revenue and earnings than Ashland. Ashland is trading at a lower price-to-earnings ratio than Toray Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ashland and Toray Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ashland	-46.01%	6.82%	3.26%
Toray Industries	2.72%	3.81%	2.11%

Risk and Volatility

Ashland has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, Toray Industries has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Institutional & Insider Ownership

94.0% of Ashland shares are owned by institutional investors. 1.0% of Ashland shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Ashland pays an annual dividend of $1.66 per share and has a dividend yield of 2.9%. Toray Industries pays an annual dividend of $0.17 per share and has a dividend yield of 1.3%. Ashland pays out -8.9% of its earnings in the form of a dividend. Toray Industries pays out 29.3% 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. Ashland has raised its dividend for 16 consecutive years. Ashland is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Ashland beats Toray Industries on 11 of the 17 factors compared between the two stocks.

About Ashland

Ashland Inc. provides additives and specialty ingredients in the North and Latin America, Europe, Asia Pacific, and internationally. It operates through Life Sciences, Personal Care, Specialty Additives, and Intermediates segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions. Its Personal Care segment provides a range of nature-based, biodegradable, and performance ingredients; solutions for toothpastes, mouth washes and rinses, denture cleaning, and care for teeth; and household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers. The Specialty Additives segment offers rheology modifiers, foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, environmental filters, ingredients for the manufacturing of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals, and alloys for welding. Its Intermediates segment produces 1,4 butanediol and related derivatives, including n-methylpyrrolidone. It offers its products to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical. The company was formerly known as Ashland Global Holdings Inc. and changed its name to Ashland Inc. in August 2022. Ashland Inc. was founded in 1924 and is headquartered in Wilmington, Delaware.

About Toray Industries

Toray Industries, Inc., together with its subsidiaries, manufactures, processes, and sells fibers and textiles, performance chemicals, carbon fiber composite materials, environment and engineering products, and life science products in Japan, China, North America, Europe, and internationally. The company offers filament yarns, staple fibers, and spun yarns, as well as woven and knitted fabrics of nylon, polyester, acrylics, and others; non-woven fabrics; ultra-fine fibers; and apparel products. It also provides nylon, ABS, PBT, PPS, and other resins and molded products; polyolefin foam products; polyester, polyethylene, polypropylene, and other films; processed film products; raw materials for synthetic fibers and other plastics; fine chemicals; electronic and information materials; and graphic materials. In addition, the company offers carbon fibers, carbon fiber composite materials, and molded products; analysis, physical evaluation, research, and other services; and pharmaceuticals, medical devices, etc. Further, it provides engineering services; condominiums; industrial equipment and machinery; IT-related equipment; water treatment membranes and related equipment; and materials for housing, building, and civil engineering applications. The company was formerly known as Toyo Rayon Co., Ltd. and changed its name to Toray Industries, Inc. in 1970. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.