Comparing Element Solutions (NYSE:ESI) and Mosaic (NYSE:MOS)

Mosaic (NYSE:MOS) and Element Solutions (NYSE:ESI) are both mid-cap materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, risk, profitability, valuation and earnings.

Insider & Institutional Ownership

77.5% of Mosaic shares are held by institutional investors. Comparatively, 92.3% of Element Solutions shares are held by institutional investors. 0.3% of Mosaic shares are held by company insiders. Comparatively, 6.2% of Element Solutions shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Mosaic has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Element Solutions has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Mosaic and Element Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mosaic	3	11	7	0	2.19
Element Solutions	0	3	6	4	3.08

Mosaic presently has a consensus target price of $27.17, suggesting a potential upside of 4.71%. Element Solutions has a consensus target price of $46.00, suggesting a potential upside of 28.42%. Given Element Solutions’ stronger consensus rating and higher probable upside, analysts clearly believe Element Solutions is more favorable than Mosaic.

Profitability

This table compares Mosaic and Element Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mosaic	-5.21%	3.77%	1.87%
Element Solutions	5.67%	14.88%	7.51%

Dividends

Mosaic pays an annual dividend of $0.88 per share and has a dividend yield of 3.4%. Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. Mosaic pays out -43.6% of its earnings in the form of a dividend. Element Solutions pays out 43.2% 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. Mosaic has increased its dividend for 7 consecutive years. Mosaic is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Mosaic and Element Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mosaic	$12.05 billion	0.68	$540.70 million	($2.02)	-12.84
Element Solutions	$2.55 billion	3.42	$190.80 million	$0.74	48.41

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

Summary

Element Solutions beats Mosaic on 12 of the 18 factors compared between the two stocks.

About Mosaic

The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients in North America and internationally. The company operates through three segments: Phosphates, Potash, and Mosaic Fertilizantes. It owns and operates mines, which produce concentrated phosphate crop nutrients, such as diammonium phosphate, monoammonium phosphate, and ammoniated phosphate products; and phosphate-based animal feed ingredients primarily under the Biofos and Nexfos brand names, as well as produces a double sulfate of potash magnesia product under K-Mag brand name. The company also produces and sells potash for use in the manufacturing of mixed crop nutrients and animal feed ingredients, and for industrial use; and for use in the de-icing and as a water softener regenerant. In addition, it provides nitrogen-based crop nutrients, animal feed ingredients, and other ancillary services; and purchases and sells phosphates, potash, and nitrogen products. The company sells its products to wholesale distributors, retail chains, farmers, cooperatives, independent retailers, and national accounts. The company was incorporated in 2004 and is headquartered in Tampa, Florida.

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.