Critical Comparison: A. Schulman (SHLM) versus Trinseo (TSE)

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

Insider & Institutional Ownership

87.1% of A. Schulman shares are owned by institutional investors. Comparatively, 99.7% of Trinseo shares are owned by institutional investors. 3.3% of A. Schulman shares are owned by insiders. Comparatively, 0.3% of Trinseo shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
A. Schulman 0 3 0 0 2.00
Trinseo 0 2 4 0 2.67

A. Schulman presently has a consensus target price of $37.00, indicating a potential downside of 15.62%. Trinseo has a consensus target price of $88.60, indicating a potential upside of 17.82%. Given Trinseo’s stronger consensus rating and higher possible upside, analysts clearly believe Trinseo is more favorable than A. Schulman.

Risk & Volatility

A. Schulman has a beta of 1.37, suggesting that its share price is 37% more volatile than the S&P 500. Comparatively, Trinseo has a beta of 2.3, suggesting that its share price is 130% more volatile than the S&P 500.

Profitability

This table compares A. Schulman and Trinseo’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%
Trinseo 7.42% 59.08% 13.86%

Valuation & Earnings

This table compares A. Schulman and Trinseo’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
A. Schulman $2.46 billion 0.53 $33.02 million $1.75 25.06
Trinseo $4.45 billion 0.73 $328.30 million $8.13 9.25

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

Dividends

A. Schulman pays an annual dividend of $0.82 per share and has a dividend yield of 1.9%. Trinseo pays an annual dividend of $1.44 per share and has a dividend yield of 1.9%. A. Schulman pays out 46.9% of its earnings in the form of a dividend. Trinseo pays out 17.7% 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. Trinseo is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Trinseo beats A. Schulman on 14 of the 16 factors compared between the two stocks.

A. Schulman Company Profile

A. Schulman, Inc. manufactures and supplies plastic compounds and resins. It offers custom performance colors, including standard and customized colors, organic and inorganic pigments, high chroma colors in translucent or opaque formats, and special effects. The company also provides engineered composites, such as bulk molding compounds, sheet molding compounds, and thick molding compounds, as well as high performance engineered structural composite solutions for original equipment manufacturers and custom molders. In addition, it offers concentrates to enhance the performance, appearance, and processing of plastics for intended applications; additive solutions; and application solutions that minimize the use of plastics, or incorporate the use of recycled plastics or renewable-based polymers, as well as provides films for agriculture, packaging, and personal care and hygiene applications. Further, the company offers polymer solutions, which provide structural integrity; multi-component blends that include polyolefins, nylons, polyesters and elastomers, and others; and formulating know-how with fiber reinforcements, such as glass and carbon, nano-reinforcements, flame retardants, impact modifiers, and UV stabilization. Additionally, it offers size reduction services; specialty powders for rotational molding, oil and gas additives, and sports and leisure products; jet milling services used for products requiring fine particle size; and cryogenic milling services. The company also buys, repackages, and resells polymers for processing types, such as injection molding, blow molding, thermoforming, and film and sheet extruding. It serves packaging, mobility, building and construction, electronics and electrical, agriculture, personal care and hygiene, custom services, sports, home, and leisure markets in Europe, the Middle East, Africa, the United States, Canada, Latin America, and the Asia Pacific. The company was founded in 1928 and is headquartered in Fairlawn, Ohio.

Trinseo Company Profile

Trinseo S.A., a materials company, manufactures and markets synthetic rubber, latex binders, and plastic products in Europe, the United States, the Asia Pacific, and internationally. The company operates through Latex Binders, Synthetic Rubber, Performance Plastics, Basic Plastics, Feedstocks, and Americas Styrenics segments. The Latex Binders segment offers styrene-butadiene, styrene-acrylate, vinylidene chloride, and butadiene-methacrylate latex products for the commercial and niche carpet markets, as well as performance latex products for the adhesive, building and construction, and technical textile paper markets. The Synthetic Rubber segment provides styrene-butadiene rubber, emulsion styrene-butadiene rubber, nickel polybutadiene rubber, and neodymium polybutadiene rubber for use in tires, modifiers, and technical rubber products. The Performance Plastics segment offers engineered compounds and blend products for the automotive, consumer electronics, medical, electrical, and lighting markets. The Basic Plastics segment provides polystyrene, polycarbonate, acrylonitrile-butadiene-styrene, and styrene-acrylonitrile for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials. The Feedstocks segment offers styrene monomer, a basic building block of plastics. The Americas Styrenics segment provides styrene and polystyrene, as well as general purpose polystyrenes, high heat, high impact resin, and STYRON A-TECH polystyrene products. The company's products are also used in carpet and artificial turf backing, coated and specialty paper, and other markets. Trinseo S.A. was founded in 2010 and is headquartered in Berwyn, Pennsylvania.

Receive News & Ratings for A. Schulman Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for A. Schulman and related companies with MarketBeat.com's FREE daily email newsletter.


Leave a Reply