Critical Review: Orion (NYSE:OEC) & 5E Advanced Materials (NASDAQ:FEAM)

5E Advanced Materials (NASDAQ:FEAM) and Orion (NYSE:OEC) are both small-cap basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Insider & Institutional Ownership

94.3% of Orion shares are owned by institutional investors. 0.2% of 5E Advanced Materials shares are owned by insiders. Comparatively, 2.7% of Orion shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares 5E Advanced Materials and Orion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
5E Advanced Materials	N/A	-103.10%	-64.96%
Orion	-1.74%	14.90%	3.45%

Analyst Ratings

This is a breakdown of current ratings and price targets for 5E Advanced Materials and Orion, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
5E Advanced Materials	1	1	2	0	2.25
Orion	3	2	0	0	1.40

5E Advanced Materials currently has a consensus target price of $8.13, indicating a potential upside of 274.42%. Orion has a consensus target price of $5.67, indicating a potential downside of 15.96%. Given 5E Advanced Materials’ stronger consensus rating and higher possible upside, research analysts plainly believe 5E Advanced Materials is more favorable than Orion.

Volatility and Risk

5E Advanced Materials has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500. Comparatively, Orion has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Earnings and Valuation

This table compares 5E Advanced Materials and Orion”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
5E Advanced Materials	N/A	N/A	-$31.56 million	($7.03)	-0.31
Orion	$1.88 billion	0.20	$44.20 million	($0.58)	-11.63

Orion has higher revenue and earnings than 5E Advanced Materials. Orion is trading at a lower price-to-earnings ratio than 5E Advanced Materials, indicating that it is currently the more affordable of the two stocks.

Summary

Orion beats 5E Advanced Materials on 7 of the 13 factors compared between the two stocks.

About 5E Advanced Materials

5E Advanced Materials, Inc. engages in the exploration and development of mineral properties in Australia and the United States. The company primarily explores for borates and lithium deposits. It holds 100% interest in the Fort Cady project located in the Mojave Desert region in eastern San Bernardino County, California. The company was formerly known as American Pacific Borates Limited. The company was incorporated in 2016 and is based in Hesperia, California.

About Orion

Orion S.A., together with its subsidiaries, engages in the manufacture and sale of carbon black products. It operates in two segments, Specialty Carbon Black and Rubber Carbon Black. The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for batteries, polymers, and coatings. It also provides rubber carbon black products for applications in mechanical rubber goods, as well as in tires under the ECORAX brand name; and acetylene-based conductive additives for lithium-ion batteries and other applications. It operates in the United States, Brazil, rest of the Americas, Germany, South Africa, Italy, Spain, Turkey, France, Rest of EMEA, China, the Republic of Korea, and rest of Asia. The company was formerly known as Orion Engineered Carbons S.A. and changed its name to Orion S.A. in June 2023. Orion S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.