Analyzing A Schulman (SHLM) & AdvanSix (ASIX)

A Schulman (NASDAQ: SHLM) and AdvanSix (NYSE:ASIX) are both small-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.

Analyst Recommendations

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This is a breakdown of current recommendations and price targets for A Schulman and AdvanSix, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
A Schulman 0 3 0 0 2.00
AdvanSix 0 0 1 0 3.00

A Schulman currently has a consensus price target of $37.00, indicating a potential downside of 13.85%. AdvanSix has a consensus price target of $41.00, indicating a potential upside of 12.21%. Given AdvanSix’s stronger consensus rating and higher possible upside, analysts clearly believe AdvanSix is more favorable than A Schulman.

Volatility and Risk

A Schulman has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500. Comparatively, AdvanSix has a beta of 1.45, meaning that its share price is 45% more volatile than the S&P 500.

Dividends

A Schulman pays an annual dividend of $0.82 per share and has a dividend yield of 1.9%. AdvanSix does not pay a dividend. A Schulman pays out 46.9% of its earnings in the form of a dividend.

Profitability

This table compares A Schulman and AdvanSix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
A Schulman 1.74% 20.83% 2.39%
AdvanSix 9.94% 32.17% 9.95%

Institutional and Insider Ownership

87.8% of A Schulman shares are owned by institutional investors. Comparatively, 78.0% of AdvanSix shares are owned by institutional investors. 3.3% of A Schulman shares are owned by company insiders. Comparatively, 2.7% of AdvanSix shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares A Schulman and AdvanSix’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
A Schulman $2.46 billion 0.52 $33.02 million $1.75 24.54
AdvanSix $1.48 billion 0.75 $146.69 million $3.00 12.18

AdvanSix has lower revenue, but higher earnings than A Schulman. AdvanSix is trading at a lower price-to-earnings ratio than A Schulman, indicating that it is currently the more affordable of the two stocks.

Summary

AdvanSix beats A Schulman on 11 of the 16 factors compared between the two stocks.

About A Schulman

A. Schulman, Inc. is an international supplier of plastic formulations, resins and services, and provides solutions to its customers’ requirements through custom-formulated products. The Company’s customers span a range of markets, such as packaging, mobility, building and construction, electronics and electrical, agriculture, personal care and hygiene, custom services, and sports, home and leisure. The Company’s segments include Europe, Middle East and Africa (EMEA), the United States and Canada (USCAN), Latin America (LATAM), Asia Pacific (APAC) and Engineered Composites (EC). As of August 31, 2016, the Company operated in six product families, including custom performance colors (CPC), engineered composites, Masterbatch solutions, engineered plastics, specialty powders and distribution services. The CPC product family offers powdered, pelletized and liquid color concentrates that are custom-designed for thermoplastic resins.

About AdvanSix

AdvanSix Inc. manufactures and sells polymer resins in the United States. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce engineered plastics, fibers, filaments, and films. The company also provides caprolactam, ammonium sulfate fertilizers, and acetone, as well as other intermediate chemicals, including phenol, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, cyclohexanol, acetaldehyde oxime, 2-pentanone oxime, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.

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