Head to Head Analysis: Trinseo (NYSE:TSE) versus Quaker Houghton (NYSE:KWR)

Trinseo (NYSE:TSE) and Quaker Houghton (NYSE:KWR) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Dividends

Trinseo pays an annual dividend of $0.04 per share and has a dividend yield of 17.4%. Quaker Houghton pays an annual dividend of $2.03 per share and has a dividend yield of 1.4%. Trinseo pays out -0.3% of its earnings in the form of a dividend. Quaker Houghton pays out 725.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Trinseo has increased its dividend for 1 consecutive years and Quaker Houghton has increased its dividend for 17 consecutive years. Trinseo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Trinseo and Quaker Houghton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trinseo	-13.15%	N/A	-11.72%
Quaker Houghton	0.22%	9.03%	4.39%

Earnings & Valuation

This table compares Trinseo and Quaker Houghton”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinseo	$3.13 billion	0.00	-$348.50 million	($11.55)	-0.02
Quaker Houghton	$1.89 billion	1.38	-$2.49 million	$0.28	536.08

Quaker Houghton has lower revenue, but higher earnings than Trinseo. Trinseo is trading at a lower price-to-earnings ratio than Quaker Houghton, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

82.7% of Trinseo shares are owned by institutional investors. Comparatively, 77.5% of Quaker Houghton shares are owned by institutional investors. 4.5% of Trinseo shares are owned by company insiders. Comparatively, 1.0% of Quaker Houghton shares are owned by company 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.

Volatility & Risk

Trinseo has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Quaker Houghton has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Trinseo and Quaker Houghton, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinseo	1	2	0	0	1.67
Quaker Houghton	1	1	4	0	2.50

Trinseo presently has a consensus target price of $1.00, indicating a potential upside of 334.78%. Quaker Houghton has a consensus target price of $168.00, indicating a potential upside of 11.92%. Given Trinseo’s higher probable upside, equities research analysts plainly believe Trinseo is more favorable than Quaker Houghton.

Summary

Quaker Houghton beats Trinseo on 10 of the 17 factors compared between the two stocks.

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.

About Quaker Houghton

Quaker Chemical Corporation, together with its subsidiaries, develops, produces, and markets various formulated specialty chemical products for a range of heavy industrial and manufacturing applications in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die-cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids, and surface treatment chemicals. The company also provides chemical management services. It serves steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies. The company was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.