Financial Contrast: Element Solutions (NYSE:ESI) vs. 5E Advanced Materials (NASDAQ:FEAM)

5E Advanced Materials (NASDAQ:FEAM) and Element Solutions (NYSE:ESI) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, analyst recommendations, valuation and dividends.

Institutional and Insider Ownership

92.3% of Element Solutions shares are held by institutional investors. 0.2% of 5E Advanced Materials shares are held by company insiders. Comparatively, 6.9% of Element Solutions shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for 5E Advanced Materials and Element Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
5E Advanced Materials	1	1	2	0	2.25
Element Solutions	0	2	7	2	3.00

5E Advanced Materials presently has a consensus price target of $8.13, indicating a potential upside of 306.25%. Element Solutions has a consensus price target of $35.75, indicating a potential upside of 1.94%. Given 5E Advanced Materials’ higher possible upside, equities research analysts clearly believe 5E Advanced Materials is more favorable than Element Solutions.

Valuation & Earnings

This table compares 5E Advanced Materials and Element Solutions”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
5E Advanced Materials	N/A	N/A	-$31.56 million	($2.67)	-0.75
Element Solutions	$2.55 billion	3.35	$190.80 million	$0.79	44.39

Element Solutions has higher revenue and earnings than 5E Advanced Materials. 5E Advanced Materials is trading at a lower price-to-earnings ratio than Element Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 5E Advanced Materials and Element Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
5E Advanced Materials	N/A	-71.87%	-63.88%
Element Solutions	7.48%	13.79%	7.28%

Risk & Volatility

5E Advanced Materials has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500. Comparatively, Element Solutions has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Summary

Element Solutions beats 5E Advanced Materials on 12 of the 14 factors compared between the two stocks.

About 5E Advanced Materials

5E Advanced Materials, Inc. engages in the exploration and development of mineral properties in Australia and the United States. The company primarily explores for borates and lithium deposits. It holds 100% interest in the Fort Cady project located in the Mojave Desert region in eastern San Bernardino County, California. The company was formerly known as American Pacific Borates Limited. The company was incorporated in 2016 and is based in Hesperia, California.

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.