Toray Industries (OTCMKTS:TRYIY – Get Free Report) and Element Solutions (NYSE:ESI – Get Free Report) are both large-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, dividends, risk, profitability, earnings and institutional ownership.
Risk and Volatility
Toray Industries has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Element Solutions has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500.
Profitability
This table compares Toray Industries and Element Solutions’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Toray Industries | 3.06% | 4.22% | 2.30% |
| Element Solutions | 5.32% | 14.19% | 7.30% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Toray Industries | 0 | 1 | 0 | 1 | 3.00 |
| Element Solutions | 0 | 2 | 6 | 3 | 3.09 |
Element Solutions has a consensus target price of $39.57, suggesting a potential downside of 12.66%. Given Element Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe Element Solutions is more favorable than Toray Industries.
Earnings & Valuation
This table compares Toray Industries and Element Solutions”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Toray Industries | $17.17 billion | 0.65 | $524.84 million | $0.70 | 21.04 |
| Element Solutions | $2.55 billion | 4.33 | $190.80 million | $0.62 | 73.08 |
Toray Industries has higher revenue and earnings than Element Solutions. Toray Industries is trading at a lower price-to-earnings ratio than Element Solutions, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
92.3% of Element Solutions shares are owned by institutional investors. 6.2% of Element Solutions 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.
Dividends
Toray Industries pays an annual dividend of $0.08 per share and has a dividend yield of 0.5%. Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Toray Industries pays out 11.4% of its earnings in the form of a dividend. Element Solutions pays out 51.6% 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.
Summary
Element Solutions beats Toray Industries on 13 of the 17 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 Element Solutions
Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies surface mount technologies, fluxes, thermal management material, coatings, and other attachment materials; chemical formulations to the electronics industry; and advanced copper interconnects, die attachment, sintered silver material, adhesives, wafer bump processes, and photomask technologies for semiconductor industry. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.
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