Contrasting Hawkins (HWKN) & Innospec (IOSP)

Hawkins (NASDAQ: HWKN) and Innospec (NASDAQ:IOSP) are both small-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Dividends

Hawkins pays an annual dividend of $0.88 per share and has a dividend yield of 2.7%. Innospec pays an annual dividend of $0.78 per share and has a dividend yield of 1.1%. Innospec pays out 16.7% of its earnings in the form of a dividend.

Institutional & Insider Ownership

58.4% of Hawkins shares are held by institutional investors. Comparatively, 90.8% of Innospec shares are held by institutional investors. 3.7% of Hawkins shares are held by company insiders. Comparatively, 2.2% of Innospec shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Hawkins and Innospec’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hawkins $483.59 million 0.73 $22.55 million N/A N/A
Innospec $1.31 billion 1.29 $61.80 million $4.66 14.58

Innospec has higher revenue and earnings than Hawkins.

Analyst Ratings

This is a summary of recent recommendations for Hawkins and Innospec, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hawkins 0 0 0 0 N/A
Innospec 0 2 1 0 2.33

Innospec has a consensus target price of $65.00, suggesting a potential downside of 4.34%. Given Innospec’s higher probable upside, analysts clearly believe Innospec is more favorable than Hawkins.

Profitability

This table compares Hawkins and Innospec’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hawkins 6.53% 7.94% 4.22%
Innospec 4.73% 15.57% 8.71%

Volatility & Risk

Hawkins has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Innospec has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Summary

Innospec beats Hawkins on 9 of the 14 factors compared between the two stocks.

Hawkins Company Profile

Hawkins, Inc. blends, manufactures, and distributes chemicals and specialty ingredients primarily in the United States. It operates in three segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment provides industrial chemicals, products, and services primarily to the agriculture, chemical processing, electronics, energy, food, pharmaceutical, plating, and power generation industries. This segment primarily offers acids, alkalis, and industrial and food-grade salts. It also receives, stores, and distributes various chemicals in bulk quantities, including liquid caustic soda, sulfuric acid, hydrochloric acid, phosphoric acid, potassium hydroxide, and aqua ammonia. In addition, this segment manufactures sodium hypochlorite, and agricultural products, as well as certain food-grade products comprising liquid phosphate, lactates, and other blended products; repackages water treatment and bulk industrial chemicals; and performs custom blending of certain chemicals, and contract and private label bleach packaging. The Water Treatment segment provides 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 provides 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. Its products portfolio includes minerals, botanicals and herbs, vitamins and amino acids, excipients, joint products, sweeteners, and enzymes. Hawkins, Inc. was founded in 1938 and is headquartered in Roseville, Minnesota.

Innospec Company Profile

Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals for use as fuel additives, ingredients for personal care, home care, agrochemical, mining and other applications, and oilfield chemicals worldwide. It operates through four segments: Fuel Specialties, Performance Chemicals, Oilfield Services, and Octane Additives. The Fuel Specialties segment offers a range of specialty chemical products used as additives in various fuels. This segment's products are used in the operation of automotive, marine, and aviation engines; power station generators; and heating oil. The Performance Chemicals segment provides technology-based solutions for its customers' processes or products focused in the personal care, home care, agrochemical, and mining markets. The Oilfield Services segment develops and markets products to prevent loss of mud in drilling operations; chemical solutions for fracturing, stimulation, and completion operations; and products for oil and gas production, which enable flow assurance and asset integrity. The Octane Additives segment produces and sells tetra ethyl lead (TEL) for use in automotive gasoline. This segment is also involved in an environmental remediation business that manages the cleanup of redundant TEL plants. The company serves oil and gas exploration and production companies, oil refineries, fuel manufacturers and users, formulators of personal care and home care, agrochemical and mining formulations, and other chemical and industrial companies. The company was formerly known as Octel Corp. and changed its name to Innospec Inc. in January 2006. Innospec Inc. was founded in 1938 and is headquartered in Englewood, Colorado.

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