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

Earnings and Valuation

This table compares Trinseo and Versum Materials’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Trinseo $4.10 billion 0.73 $477.25 million $7.08 9.63
Versum Materials $1.08 billion 3.74 $355.80 million N/A N/A

Trinseo has higher revenue and earnings than Versum Materials.

Dividends

Trinseo pays an annual dividend of $1.44 per share and has a dividend yield of 2.1%. Versum Materials pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. Trinseo pays out 20.3% of its earnings in the form of a dividend.

Profitability

This table compares Trinseo and Versum Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trinseo 7.88% 67.05% 13.27%
Versum Materials 17.91% -261.88% 18.25%

Institutional & Insider Ownership

97.8% of Trinseo shares are owned by institutional investors. Comparatively, 89.6% of Versum Materials shares are owned by institutional investors. 0.7% of Trinseo shares are owned by insiders. Comparatively, 0.5% of Versum Materials 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.

Analyst Recommendations

This is a summary of recent recommendations for Trinseo and Versum Materials, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trinseo 0 2 3 0 2.60
Versum Materials 0 4 6 0 2.60

Trinseo currently has a consensus price target of $74.25, suggesting a potential upside of 8.95%. Versum Materials has a consensus price target of $34.11, suggesting a potential downside of 8.20%. Given Trinseo’s higher probable upside, analysts plainly believe Trinseo is more favorable than Versum Materials.

Summary

Trinseo beats Versum Materials on 7 of the 12 factors compared between the two stocks.

About Trinseo

Trinseo S.A. is a materials company engaged in the manufacture and marketing of synthetic rubber, latex and plastics. The Company’s segments include Latex Binders, Synthetic Rubber, Performance Plastics, Basic Plastics, Feedstocks and Americas Styrenics. The Latex Binders segment produces styrene-butadiene latex (SB latex) and other latex polymers and binders. The Synthetic Rubber segment produces synthetic rubber products used in tires, impact modifiers and technical rubber products. The Performance Plastics segment produces compounds and blends and specialized acrylonitrile-butadiene-styrene (ABS) grades. The Basic Plastics segment produces styrenic polymers, including polystyrene, basic ABS, and styrene-acrylonitrile (SAN) products, as well as polycarbonate (PC). The Feedstocks segment includes its production and procurement of styrene monomer outside of North America. The Americas Styrenics segment consists of the operations of its joint venture, Americas Styrenics LLC.

About Versum Materials

Versum Materials, Inc. is a provider of solutions to the semiconductor and display industries. The Company is engaged in the development, manufacturing, transportation and handling of specialty materials. Its segments include Materials; Delivery Systems and Services (DS&S), and Corporate. The Materials segment is an integrated provider of specialty materials for the electronics industry, focusing on the integrated circuit and flat-panel display markets. The DS&S segment designs, manufactures, installs, operates, and maintains chemical and gas delivery and distribution systems for specialty gases and chemicals delivered directly to its customers’ manufacturing tools. The Company is engaged in molecular design and synthesis, purification, advanced analytics, formulation development and containers and delivery systems for the handling of high purity materials.

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