Critical Analysis: Trinseo (NYSE:TSE) and Mativ (NYSE:MATV)

Mativ (NYSE:MATV) and Trinseo (NYSE:TSE) are both small-cap materials companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Analyst Ratings

This is a breakdown of current ratings and target prices for Mativ and Trinseo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mativ	0	1	0	0	2.00
Trinseo	1	2	0	0	1.67

Trinseo has a consensus target price of $1.00, indicating a potential upside of 334.78%. Given Trinseo’s higher probable upside, analysts clearly believe Trinseo is more favorable than Mativ.

Risk & Volatility

Mativ has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, Trinseo has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mativ	4.50%	13.53%	3.08%
Trinseo	-13.15%	N/A	-11.72%

Earnings & Valuation

This table compares Mativ and Trinseo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mativ	$1.99 billion	0.32	-$337.40 million	$1.58	7.21
Trinseo	$3.13 billion	0.00	-$348.50 million	($11.55)	-0.02

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

Insider and Institutional Ownership

95.0% of Mativ shares are owned by institutional investors. Comparatively, 82.7% of Trinseo shares are owned by institutional investors. 1.8% of Mativ shares are owned by insiders. Comparatively, 4.5% of Trinseo shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Mativ pays an annual dividend of $0.40 per share and has a dividend yield of 3.5%. Trinseo pays an annual dividend of $0.04 per share and has a dividend yield of 17.4%. Mativ pays out 25.3% of its earnings in the form of a dividend. Trinseo pays out -0.3% 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. Mativ has increased its dividend for 1 consecutive years and Trinseo has increased its dividend for 1 consecutive years. Trinseo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Mativ beats Trinseo on 9 of the 15 factors compared between the two stocks.

About Mativ

Mativ Holdings, Inc., together with its subsidiaries, manufactures and sells specialty materials in the United States, Europe, the Asia Pacific, the Americas, and internationally. The company operates through two segments, Advanced Technical Materials and Fiber-Based Solutions. The Advanced Technical Materials manufactures and sells various engineered polymer, resin and fiber-based substrates, nets, films, adhesive tapes, and other nonwovens for the filtration, protective solutions, release liners, and healthcare end-markets. This segment sells its products directly, as well as through sales agents and distributors. The Fiber-Based Solutions segment produces packaging and specialty paper products. This segment provides premium packaging products that are used for wine, spirits and beer labels, folding cartons, box wrap, bags, hang tags, and stored value cards servicing retail, cosmetics, spirits, and electronics end-use markets; and premium papers, which are used in commercial printing services, advertising collateral, stationery, corporate identity packages and brochures, direct mail, business cards, and other uses. It also offers branded paper-based products for the consumer channel, such as bright papers, cardstock, stationery paper, envelopes, journals, and planners. This segment distributes its products through authorized paper distributors, converters, retailers, and specialty business converters, as well as directly to end-users. The company was formerly known as Schweitzer-Mauduit International, Inc. and changed its name to Mativ Holdings, Inc. in July 2022. Mativ Holdings, Inc. was incorporated in 1995 and is headquartered in Alpharetta, Georgia.

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.