Head-To-Head Comparison: International Flavors & Fragrances (NYSE:IFF) versus Trinseo (NYSE:TSE)

International Flavors & Fragrances (NYSE:IFF) and Trinseo (NYSE:TSE) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, profitability and dividends.

Insider & Institutional Ownership

96.0% of International Flavors & Fragrances shares are owned by institutional investors. Comparatively, 82.7% of Trinseo shares are owned by institutional investors. 0.2% of International Flavors & Fragrances shares are owned by insiders. Comparatively, 4.5% of Trinseo shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for International Flavors & Fragrances and Trinseo, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Flavors & Fragrances	2	4	13	0	2.58
Trinseo	2	0	0	0	1.00

International Flavors & Fragrances presently has a consensus target price of $86.07, indicating a potential upside of 30.58%. Given International Flavors & Fragrances’ stronger consensus rating and higher possible upside, analysts clearly believe International Flavors & Fragrances is more favorable than Trinseo.

Profitability

This table compares International Flavors & Fragrances and Trinseo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Flavors & Fragrances	-3.48%	7.95%	3.97%
Trinseo	-11.96%	N/A	-10.21%

Earnings & Valuation

This table compares International Flavors & Fragrances and Trinseo”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Flavors & Fragrances	$11.48 billion	1.47	$243.00 million	($1.55)	-42.53
Trinseo	$3.26 billion	0.02	-$348.50 million	($10.97)	-0.15

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

Risk and Volatility

International Flavors & Fragrances has a beta of 1.07, suggesting that its stock price is 7% more volatile than the S&P 500. Comparatively, Trinseo has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.

Dividends

International Flavors & Fragrances pays an annual dividend of $1.60 per share and has a dividend yield of 2.4%. Trinseo pays an annual dividend of $0.04 per share and has a dividend yield of 2.5%. International Flavors & Fragrances pays out -103.2% of its earnings in the form of a dividend. Trinseo pays out -0.4% 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. Trinseo has raised its dividend for 1 consecutive years. Trinseo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

International Flavors & Fragrances beats Trinseo on 12 of the 17 factors compared between the two stocks.

About International Flavors & Fragrances

International Flavors & Fragrances, Inc. engages in the manufacture and supply of flavors and fragrances used in the food, beverage, personal care, and household products industries. It operates through the following segments: Nourish, Health & Biosciences, Scent and Pharma Solutions. The Nourish segment consists of legacy Taste segment combined with N&B’s Food & Beverage division and the food protection business of N&B’s Health & Biosciences division. The Health & Biosciences business consists of a biotechnology-driven portfolio of enzymes, food cultures, probiotics and specialty ingredients for food, home and personal care, and health and wellness applications. The Scent business creates fragrance compounds, fragrance ingredients and cosmetic ingredients that are integral elements in the world’s finest perfumes and best-known household and personal care products. The Pharma Solutions business produces a vast portfolio including cellulosics and seaweed-based pharma excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling. The company was founded in 1833 and is headquartered in New York, NY.

About Trinseo

Trinseo PLC operates as a specialty material solutions provider in the United States, Europe, the Asia-Pacific, and internationally. It operates through five segments: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics. The Engineered Materials segment offers rigid thermoplastic compounds and blends, soft thermoplastic, continuous cast, cell cast, activated methyl methacrylates (MMA), PMMA resins, and extruded PMMA sheets and resins for consumer electronics, medical, footwear, automotive, and building and construction applications under the EMERGE, CALIBRE, PLEXIGLAS, ALTUGLAS, ACRYSPA, AVONITE, STUDIO, MEGOL, APILON, APIGO, and APINAT brands. The Latex Binders segment provides styrene-butadiene latex, and other latex polymers and binders primarily for coated paper and packaging board, carpet, and artificial turf backings, as well as the adhesive, building and construction, and technical textile paper market. The Plastics Solutions segment offers acrylonitrile-butadiene-styrene, styrene-acrylonitrile, polycarbonate, and compounds and blends for automotive and other applications under the MAGNUM brand. The Polystyrene segment provides general purpose polystyrenes and high impact polystyrene for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials under the STYRON brand. The Americas Styrenics segment provides styrene and polystyrene for appliances, food packaging, food service disposables, consumer electronics, and building and construction materials applications. Trinseo PLC was incorporated in 2015 and is headquartered in Wayne, Pennsylvania.