Head to Head Analysis: Hawkins (HWKN) vs. Dow Chemical (DOW)

Dow Chemical (NYSE: DOW) and Hawkins (NASDAQ:HWKN) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.

Earnings and Valuation

This table compares Dow Chemical and Hawkins’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dow Chemical N/A N/A N/A $2.39 N/A
Hawkins $483.59 million 0.76 $22.55 million $3.05 11.31

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Dow Chemical and Hawkins, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dow Chemical 0 3 5 0 2.63
Hawkins 0 0 0 0 N/A

Dow Chemical presently has a consensus price target of $72.14, suggesting a potential upside of Infinity. Given Dow Chemical’s higher possible upside, equities research analysts clearly believe Dow Chemical is more favorable than Hawkins.

Dividends

Dow Chemical pays an annual dividend of $1.84 per share. Hawkins pays an annual dividend of $0.88 per share and has a dividend yield of 2.6%. 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. Hawkins pays out 28.9% of its earnings in the form of a dividend. Hawkins is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

67.8% of Dow Chemical shares are held by institutional investors. Comparatively, 58.7% of Hawkins shares are held by institutional investors. 0.9% of Dow Chemical shares are held by insiders. Comparatively, 3.7% of Hawkins shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Dow Chemical has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Hawkins has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Profitability

This table compares Dow Chemical and Hawkins’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dow Chemical 5.90% 10.92% 3.89%
Hawkins 6.53% 7.94% 4.22%

Summary

Hawkins beats Dow Chemical on 7 of the 13 factors compared between the two stocks.

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.

About Hawkins

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.

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