Analyzing Innophos (IPHS) and Trecora Resources (TREC)
Innophos (NASDAQ: IPHS) and Trecora Resources (NYSE:TREC) are both small-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.
This table compares Innophos and Trecora Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Innophos has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Trecora Resources has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500.
Earnings and Valuation
This table compares Innophos and Trecora Resources’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Innophos||$725.34 million||1.24||$47.97 million||$2.17||21.30|
|Trecora Resources||$212.40 million||1.49||$19.42 million||$0.13||100.39|
Innophos has higher revenue and earnings than Trecora Resources. Innophos is trading at a lower price-to-earnings ratio than Trecora Resources, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for Innophos and Trecora Resources, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Innophos presently has a consensus price target of $56.00, indicating a potential upside of 21.16%. Trecora Resources has a consensus price target of $15.33, indicating a potential upside of 17.50%. Given Innophos’ higher probable upside, research analysts clearly believe Innophos is more favorable than Trecora Resources.
Insider and Institutional Ownership
94.5% of Innophos shares are held by institutional investors. Comparatively, 42.7% of Trecora Resources shares are held by institutional investors. 2.3% of Innophos shares are held by insiders. Comparatively, 6.6% of Trecora Resources shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Innophos pays an annual dividend of $1.92 per share and has a dividend yield of 4.2%. Trecora Resources does not pay a dividend. Innophos pays out 88.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Innophos beats Trecora Resources on 9 of the 16 factors compared between the two stocks.
Innophos Holdings, Inc. is a producer of nutritional specialty ingredients with applications in food, beverage, dietary supplements, pharmaceutical, oral care and industrial end markets. The Company also provides bioactive mineral and nutritional ingredients. The Company’s segments include Specialty Phosphates US & Canada, Specialty Phosphates Mexico, and Granular Triple Super Phosphate (GTSP) & Other. The Company has four principal product lines: Specialty Ingredients; Food and Technical Grade Purified Phosphoric Acid (PPA); Technical Grade Sodium Tripolyphosphate (STPP), & Detergent Grade PPA, and GTSP & Other. The Company’s bioactive mineral ingredients are mineral-based ingredients for food, beverage and dietary supplement end markets that are manufactured to be readily digestible. The Company has its manufacturing facilities located throughout the United States, Canada, Mexico and China.
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.
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