Hawkins (NASDAQ: HWKN) and Dow Chemical (NYSE:DOW) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.
Hawkins pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. Dow Chemical pays an annual dividend of $1.84 per share and has a dividend yield of 2.8%. Hawkins pays out 28.9% of its earnings in the form of a dividend. Dow Chemical pays out 77.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Hawkins and Dow Chemical’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations for Hawkins and Dow Chemical, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Dow Chemical has a consensus target price of $72.14, indicating a potential upside of 8.24%. Given Dow Chemical’s higher possible upside, analysts plainly believe Dow Chemical is more favorable than Hawkins.
Institutional & Insider Ownership
58.7% of Hawkins shares are owned by institutional investors. Comparatively, 67.8% of Dow Chemical shares are owned by institutional investors. 3.7% of Hawkins shares are owned by insiders. Comparatively, 0.9% of Dow Chemical shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Hawkins and Dow Chemical’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hawkins||$483.59 million||0.76||$22.55 million||$3.05||11.34|
Hawkins has higher revenue and earnings than Dow Chemical. Hawkins is trading at a lower price-to-earnings ratio than Dow Chemical, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Hawkins has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Dow Chemical has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.
Dow Chemical beats Hawkins on 7 of the 13 factors compared between the two stocks.
Hawkins, Inc. distributes, blends and manufactures chemicals and specialty ingredients for its customers in a range of industries. The Company conducts its business in three segments: Industrial, Water Treatment, and Health and Nutrition. Its Industrial segment is engaged in providing industrial chemicals, products and services to various industries, such as agriculture, chemical processing, electronics and energy. Its Water Treatment segment is engaged in providing chemicals, equipment and solutions for potable water, municipal and industrial wastewater, industrial process water and non-residential swimming pool water. The Health and Nutrition segment is engaged in providing ingredient distribution, processing and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products.
About Dow Chemical
The Dow Chemical Company manufactures and supplies products used primarily as raw materials in the manufacture of customer products and services. The Company’s segments include Agricultural Sciences, which is engaged in providing crop protection and seed/plant biotechnology products and technologies, urban pest management solutions and healthy oils; Consumer Solutions, which consists of Consumer Care, Dow Automotive Systems, Dow Electronic Materials and Consumer Solutions-Silicones businesses; Infrastructure Solutions, which consists of Dow Building & Construction, Dow Coating Materials, Energy & Water Solutions, Performance Monomers and Infrastructure Solutions-Silicones businesses; Performance Materials & Chemicals, which consists of Chlor-Alkali and Vinyl, Industrial Solutions and Polyurethanes businesses, and Performance Plastics, which consists of Dow Elastomers, Dow Electrical and Telecommunications, Dow Packaging and Specialty Plastics, Energy and Hydrocarbons businesses.
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