PolyOne (NYSE: POL) and Hawkins (NASDAQ:HWKN) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.
Insider & Institutional Ownership
93.9% of PolyOne shares are owned by institutional investors. Comparatively, 58.4% of Hawkins shares are owned by institutional investors. 1.6% of PolyOne shares are owned by insiders. Comparatively, 3.7% of Hawkins shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
PolyOne pays an annual dividend of $0.70 per share and has a dividend yield of 1.6%. Hawkins pays an annual dividend of $0.88 per share and has a dividend yield of 2.7%. PolyOne pays out -100.0% of its earnings in the form of a dividend. Hawkins pays out 48.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hawkins has increased its dividend for 6 consecutive years. Hawkins is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and price targets for PolyOne and Hawkins, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
PolyOne currently has a consensus target price of $45.00, indicating a potential upside of 5.04%. Given PolyOne’s higher probable upside, research analysts clearly believe PolyOne is more favorable than Hawkins.
This table compares PolyOne and Hawkins’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
PolyOne has a beta of 1.73, meaning that its stock price is 73% more volatile than the S&P 500. Comparatively, Hawkins has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.
Earnings & Valuation
This table compares PolyOne and Hawkins’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|PolyOne||$3.23 billion||1.07||-$57.70 million||($0.70)||-61.20|
|Hawkins||$483.59 million||0.73||$22.55 million||$1.81||18.20|
Hawkins has lower revenue, but higher earnings than PolyOne. PolyOne is trading at a lower price-to-earnings ratio than Hawkins, indicating that it is currently the more affordable of the two stocks.
PolyOne beats Hawkins on 9 of the 16 factors compared between the two stocks.
PolyOne Corporation (PolyOne) provides specialized polymer materials, services and solutions. The Company’s segments include Color, Additives and Inks; Specialty Engineered Materials; Performance Products and Solutions, and PolyOne Distribution. The Color, Additives and Inks segment provides custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets. The Specialty Engineered Materials segment provides specialty polymer formulations, services and solutions for designers, assemblers and processors of thermoplastic materials. The Performance Products and Solutions segment consists of the Geon Performance Materials and Producer Services business units. As of December 31, 2016, the PolyOne Distribution segment distributed more than 4,000 grades of engineering and commodity grade resins.
Hawkins, Inc. distributes, blends and manufactures chemicals and specialty ingredients for its customers in a range of industries. The Company conducts its business in three segments: Industrial, Water Treatment, and Health and Nutrition. Its Industrial segment is engaged in providing industrial chemicals, products and services to various industries, such as agriculture, chemical processing, electronics and energy. Its Water Treatment segment is engaged in providing chemicals, equipment and solutions for potable water, municipal and industrial wastewater, industrial process water and non-residential swimming pool water. The Health and Nutrition segment is engaged in providing ingredient distribution, processing and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products.
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