Trecora Resources (NYSE: TREC) and Celanese Corporation (NYSE:CE) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, dividends, profitability, risk and valuation.

Risk and Volatility

Trecora Resources has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500. Comparatively, Celanese Corporation has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Dividends

Celanese Corporation pays an annual dividend of $1.84 per share and has a dividend yield of 1.8%. Trecora Resources does not pay a dividend. Celanese Corporation pays out 32.1% of its earnings in the form of a dividend. Celanese Corporation has increased its dividend for 5 consecutive years.

Earnings and Valuation

This table compares Trecora Resources and Celanese Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Trecora Resources $229.00 million 1.29 $26.34 million $0.09 135.02
Celanese Corporation $5.86 billion 2.43 $1.17 billion $5.73 18.20

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

Insider and Institutional Ownership

41.2% of Trecora Resources shares are owned by institutional investors. Comparatively, 98.5% of Celanese Corporation shares are owned by institutional investors. 6.6% of Trecora Resources shares are owned by insiders. Comparatively, 0.4% of Celanese Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Trecora Resources and Celanese Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trecora Resources 0 0 3 0 3.00
Celanese Corporation 1 4 8 1 2.64

Trecora Resources currently has a consensus target price of $15.67, indicating a potential upside of 28.94%. Celanese Corporation has a consensus target price of $107.85, indicating a potential upside of 3.39%. Given Trecora Resources’ stronger consensus rating and higher possible upside, equities analysts clearly believe Trecora Resources is more favorable than Celanese Corporation.

Profitability

This table compares Trecora Resources and Celanese Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trecora Resources 0.97% 3.94% 2.23%
Celanese Corporation 13.66% 31.98% 11.39%

Summary

Celanese Corporation beats Trecora Resources on 12 of the 18 factors compared between the two stocks.

About Trecora Resources

Trecora Resources (TREC) is a provider of high-purity specialty hydrocarbons and waxes. TREC owns and operates a facility located in southeast Texas, just north of Beaumont, which specializes in high-purity hydrocarbons and other petrochemical manufacturing. The Company operates through two segments: specialty petrochemical products and 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. In addition, the Company is the 33.4% owner of Al Masane Al Kobra Mining Co., a Saudi Arabian joint stock company.

About Celanese Corporation

Celanese Corporation (Celanese) is a technology and specialty materials company. The Company’s segments include Advanced Engineered Materials, Consumer Specialties, Industrial Specialties, Acetyl Intermediates and Other Activities. The Advanced Engineered Materials segment includes the Company’s engineered materials business and certain affiliates. The Consumer Specialties segment includes the Company’s cellulose derivatives and food ingredients businesses, which serve consumer-driven applications. The Industrial Specialties segment includes the Company’s emulsion polymers and ethylene vinyl acetate (EVA) polymers businesses. The Acetyl Intermediates segment includes the Company’s intermediate chemistry business, which produces and supplies acetyl products, including acetic acid, vinyl acetate monomer (VAM), acetic anhydride and acetate esters. The Company has operations in North America, Europe and Asia. As of December 31, 2016, the Company had 30 global production facilities.

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