Sigma-Aldrich (NASDAQ: SIAL) and Trinseo (NYSE:TSE) are both specialty chemicals – nec companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Profitability

This table compares Sigma-Aldrich and Trinseo’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sigma-Aldrich 16.22% 13.72% 10.47%
Trinseo 6.78% 65.80% 13.58%

Insider and Institutional Ownership

96.9% of Trinseo shares are owned by institutional investors. 0.3% of Trinseo shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Sigma-Aldrich and Trinseo’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sigma-Aldrich N/A N/A N/A $4.08 N/A
Trinseo $3.72 billion 0.85 $318.31 million $6.38 11.38

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Sigma-Aldrich and Trinseo, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sigma-Aldrich 0 0 0 0 N/A
Trinseo 0 2 3 0 2.60

Trinseo has a consensus target price of $76.25, indicating a potential upside of 5.03%.

Dividends

Trinseo pays an annual dividend of $1.44 per share and has a dividend yield of 2.0%. Sigma-Aldrich does not pay a dividend. Trinseo pays out 22.6% of its earnings in the form of a dividend.

Summary

Trinseo beats Sigma-Aldrich on 8 of the 10 factors compared between the two stocks.

Sigma-Aldrich Company Profile

Sigma-Aldrich Corporation is a life science and high technology company. The Company develops, manufactures, purchases and distributes a range of biochemical and organic chemical products, kits and services that are used in scientific research. It manufactures and distributes around 250,000 chemicals, biochemical and other essential products and approximately 46,000 equipment products. Its business unit structure is aligned into three business units: Research, Applied and SAFC Commercial. Its brands include Sigma-Aldrich, Sigma, Aldrich, Fluka, Riedel-de Haen, Supelco, SAFC, SAFC Biosciences, SAFC Hitech, Genosys, Proligo, Pharmorphix, Cerilliant, Vetec, BioReliance and Cell Marque. It offers its products and services to research and applied labs, pharmaceutical companies, universities, commercial laboratories, industrial companies, biotechnology companies and non-profit organizations, among others. It operates in around 37 countries and sells into approximately 160 countries.

Trinseo Company Profile

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.

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