Contrasting Sensient Technologies (NYSE:SXT) & Toray Industries (OTCMKTS:TRYIY)

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

Dividends

Toray Industries pays an annual dividend of $0.17 per share and has a dividend yield of 1.3%. Sensient Technologies pays an annual dividend of $1.64 per share and has a dividend yield of 1.8%. Toray Industries pays out 29.3% of its earnings in the form of a dividend. Sensient Technologies pays out 51.7% 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.

Earnings and Valuation

This table compares Toray Industries and Sensient Technologies”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toray Industries	$16.83 billion	0.63	$514.21 million	$0.58	22.66
Sensient Technologies	$1.56 billion	2.56	$124.67 million	$3.17	29.56

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

Volatility and Risk

Toray Industries has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, Sensient Technologies has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Toray Industries and Sensient Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toray Industries	0	2	0	0	2.00
Sensient Technologies	0	1	2	0	2.67

Sensient Technologies has a consensus price target of $110.00, indicating a potential upside of 17.40%. Given Sensient Technologies’ stronger consensus rating and higher possible upside, analysts clearly believe Sensient Technologies is more favorable than Toray Industries.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Toray Industries	2.72%	3.76%	2.06%
Sensient Technologies	8.56%	12.56%	6.60%

Insider & Institutional Ownership

90.9% of Sensient Technologies shares are held by institutional investors. 1.2% of Sensient Technologies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Sensient Technologies beats Toray Industries on 13 of the 16 factors compared between the two stocks.

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.

About Sensient Technologies

Sensient Technologies Corporation, together with its subsidiaries, develops, manufactures, and markets colors, flavors, and other specialty ingredients in North America, Europe, Asia, Australia, South America, and Africa. The company offers flavor-delivery systems, and compounded and blended products; ingredient products, such as essential oils, natural and synthetic flavors, and natural extracts; and chili powder, paprika, and chili pepper, as well as dehydrated vegetables comprising parsley, celery, and spinach to the food, beverage, and personal care industries. It also provides natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, including colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications under the Sensient Food Colors, Sensient Pharmaceutical Coating Systems, Sensient Cosmetic Technologies, and Sensient Specialty Markets trade names. Sensient Technologies Corporation was incorporated in 1882 and is headquartered in Milwaukee, Wisconsin.