Head to Head Contrast: Trinseo (NYSE:TSE) vs. Huabao International (OTCMKTS:HUIHY)

Trinseo (NYSE:TSE) and Huabao International (OTCMKTS:HUIHY) are both small-cap basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Dividends

Trinseo pays an annual dividend of $0.04 per share and has a dividend yield of 6.7%. Huabao International pays an annual dividend of $0.06 per share and has a dividend yield of 0.2%. Trinseo pays out -0.3% of its earnings in the form of a dividend. Trinseo has raised its dividend for 1 consecutive years. Trinseo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Trinseo and Huabao International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinseo	1	2	0	0	1.67
Huabao International	0	0	0	0	0.00

Trinseo presently has a consensus target price of $1.00, indicating a potential upside of 67.50%. Given Trinseo’s stronger consensus rating and higher probable upside, research analysts plainly believe Trinseo is more favorable than Huabao International.

Risk & Volatility

Trinseo has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500. Comparatively, Huabao International has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500.

Profitability

This table compares Trinseo and Huabao International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trinseo	-13.15%	N/A	-11.72%
Huabao International	N/A	N/A	N/A

Valuation & Earnings

This table compares Trinseo and Huabao International”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinseo	$3.13 billion	0.01	-$348.50 million	($11.55)	-0.05
Huabao International	$469.25 million	N/A	-$53.62 million	N/A	N/A

Huabao International has lower revenue, but higher earnings than Trinseo.

Insider & Institutional Ownership

82.7% of Trinseo shares are held by institutional investors. 4.5% of Trinseo shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Trinseo beats Huabao International on 9 of the 12 factors compared between the two stocks.

About Trinseo

Trinseo PLC operates as a specialty material solutions provider in the United States, Europe, the Asia-Pacific, and internationally. It operates through five segments: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics. The Engineered Materials segment offers rigid thermoplastic compounds and blends, soft thermoplastic, continuous cast, cell cast, activated methyl methacrylates (MMA), PMMA resins, and extruded PMMA sheets and resins for consumer electronics, medical, footwear, automotive, and building and construction applications under the EMERGE, CALIBRE, PLEXIGLAS, ALTUGLAS, ACRYSPA, AVONITE, STUDIO, MEGOL, APILON, APIGO, and APINAT brands. The Latex Binders segment provides styrene-butadiene latex, and other latex polymers and binders primarily for coated paper and packaging board, carpet, and artificial turf backings, as well as the adhesive, building and construction, and technical textile paper market. The Plastics Solutions segment offers acrylonitrile-butadiene-styrene, styrene-acrylonitrile, polycarbonate, and compounds and blends for automotive and other applications under the MAGNUM brand. The Polystyrene segment provides general purpose polystyrenes and high impact polystyrene for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials under the STYRON brand. The Americas Styrenics segment provides styrene and polystyrene for appliances, food packaging, food service disposables, consumer electronics, and building and construction materials applications. Trinseo PLC was incorporated in 2015 and is headquartered in Wayne, Pennsylvania.

About Huabao International

Huabao International Holdings Limited, an investment holding company, researches, develops, produces, distributes, and sells flavours and fragrances, food ingredients, tobacco and aroma raw materials, and condiment products primarily in the People's Republic of China. It offers paper-making reconstituted tobacco leaves and new materials products for the tobacco industry. The company is also involved in the production and sale of natural extracts; tobacco flavours and fragrances; filter materials; cigarette filters; synthetic perfumes; and food flavours and fragrances. Huabao International Holdings Limited was founded in 1996 and is headquartered in Wan Chai, Hong Kong.