Ingevity (NYSE: NGVT) and CSW Industrials (NASDAQ:CSWI) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
Ingevity 9.86% 58.14% 12.09%
CSW Industrials 5.39% 10.77% 7.66%

Institutional & Insider Ownership

91.4% of Ingevity shares are owned by institutional investors. Comparatively, 67.8% of CSW Industrials shares are owned by institutional investors. 0.1% of Ingevity shares are owned by insiders. Comparatively, 2.1% of CSW Industrials shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Ingevity and CSW Industrials’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ingevity $908.30 million 3.58 $35.20 million $2.24 34.49
CSW Industrials $327.08 million 2.32 $11.07 million $1.20 39.67

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

Analyst Ratings

This is a breakdown of current ratings and target prices for Ingevity and CSW Industrials, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ingevity 0 0 6 0 3.00
CSW Industrials 0 0 2 0 3.00

Ingevity currently has a consensus price target of $76.00, suggesting a potential downside of 1.62%. CSW Industrials has a consensus price target of $60.00, suggesting a potential upside of 26.05%. Given CSW Industrials’ higher possible upside, analysts clearly believe CSW Industrials is more favorable than Ingevity.

Summary

Ingevity beats CSW Industrials on 10 of the 12 factors compared between the two stocks.

Ingevity Company Profile

Ingevity Corporation is a manufacturer of specialty chemicals and high performance carbon materials. The Company is also a manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. The Company operates through two segments: Performance Materials and Performance Chemicals. The Performance Materials segment primarily produces automotive carbon products used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. The Performance Chemicals segment develops, manufactures and sells a range of specialty chemicals primarily derived from co-products of the Kraft pulping process. Its products are used in a range of applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks and automotive components that reduce gasoline vapor emissions.

CSW Industrials Company Profile

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.

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