CSW Industrials (NASDAQ: CSWI) and Trecora Resources (NYSE:TREC) are both small-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Institutional and Insider Ownership

66.9% of CSW Industrials shares are owned by institutional investors. Comparatively, 36.0% of Trecora Resources shares are owned by institutional investors. 2.1% of CSW Industrials shares are owned by insiders. Comparatively, 6.6% of Trecora Resources 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.

Profitability

This table compares CSW Industrials and Trecora Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CSW Industrials 4.54% 10.53% 7.39%
Trecora Resources 0.97% 3.94% 2.23%

Earnings & Valuation

This table compares CSW Industrials and Trecora Resources’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CSW Industrials $341.00 million 1.88 $59.13 million $0.98 41.22
Trecora Resources $229.00 million 1.29 $26.34 million $0.09 135.57

CSW Industrials has higher revenue and earnings than Trecora Resources. CSW Industrials is trading at a lower price-to-earnings ratio than Trecora Resources, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for CSW Industrials and Trecora Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CSW Industrials 0 0 1 0 3.00
Trecora Resources 0 0 3 0 3.00

Trecora Resources has a consensus target price of $15.67, suggesting a potential upside of 28.42%. Given Trecora Resources’ higher probable upside, analysts plainly believe Trecora Resources is more favorable than CSW Industrials.

Volatility and Risk

CSW Industrials has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, Trecora Resources has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500.

Summary

CSW Industrials beats Trecora Resources on 8 of the 13 factors compared between the two stocks.

About CSW Industrials

CSW Industrials, Inc. (CSWI) is a diversified industrial growth company. The Company operates through three segments: Industrial Products; Coatings, Sealants & Adhesives, and Specialty Chemicals. The Industrial Products segment consists of specialty mechanical products; fire and smoke protection products; architecturally specified building products, and storage, filtration and application equipment. The Coatings, Sealants & Adhesives segment comprises coatings and penetrants, pipe thread sealants, firestopping sealants, and caulks and adhesives/solvent cements. The Specialty Chemicals segment manufactures and supplies specialized consumables that impart or enhance properties, such as lubricity, anti-seize qualities, friction and heat control. Markets that it serves include HVAC, industrial, rail, plumbing, architecturally specified building products, energy, mining and other general industrial markets.

About Trecora Resources

Trecora Resources is engaged in manufacturing of specialty petrochemical products and synthetic waxes, and providing custom processing services. The Company operates through two segments: manufacturing of various specialty petrochemical products and manufacturing of specialty synthetic waxes. The specialty petrochemical products segment operates through South Hampton Resources, Inc. (SHR). The specialty synthetic wax segment operates through Trecora Chemical, Inc. (TC). SHR owns and operates a specialty petrochemical facility that produces hydrocarbons and other petroleum-based products, including isopentane, normal pentane, isohexane and hexane. TC produces specialty polyethylene and poly alpha olefin waxes, and provides custom processing services. TC provides custom manufacturing, distillation, blending, forming, and packaging of finished and intermediate products, and wax products for coatings, hot melt adhesives and lubricants.

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