Analyzing Intrepid Potash (IPI) and Smart Sand (SND)

Intrepid Potash (NYSE:IPI) and Smart Sand (NASDAQ:SND) are both small-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, dividends, institutional ownership, risk, earnings, profitability and analyst recommendations.

Profitability

This table compares Intrepid Potash and Smart Sand’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Intrepid Potash -1.47% -1.15% -0.91%
Smart Sand 16.12% 10.72% 7.89%

Analyst Recommendations

This is a breakdown of current recommendations for Intrepid Potash and Smart Sand, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Intrepid Potash 0 2 1 0 2.33
Smart Sand 0 6 3 0 2.33

Intrepid Potash currently has a consensus price target of $4.00, suggesting a potential upside of 16.96%. Smart Sand has a consensus price target of $10.34, suggesting a potential upside of 167.97%. Given Smart Sand’s higher probable upside, analysts plainly believe Smart Sand is more favorable than Intrepid Potash.

Institutional & Insider Ownership

45.6% of Intrepid Potash shares are owned by institutional investors. Comparatively, 43.1% of Smart Sand shares are owned by institutional investors. 27.7% of Intrepid Potash shares are owned by insiders. Comparatively, 46.6% of Smart Sand shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Intrepid Potash and Smart Sand’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Intrepid Potash $157.61 million 2.84 -$22.91 million ($0.18) -19.00
Smart Sand $137.21 million 1.17 $21.52 million $0.32 12.06

Smart Sand has lower revenue, but higher earnings than Intrepid Potash. Intrepid Potash is trading at a lower price-to-earnings ratio than Smart Sand, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Intrepid Potash has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Smart Sand has a beta of 2.88, meaning that its stock price is 188% more volatile than the S&P 500.

Summary

Smart Sand beats Intrepid Potash on 10 of the 13 factors compared between the two stocks.

About Intrepid Potash

Intrepid Potash, Inc. produces and sells potash and langbeinite products in the United States and internationally. It operates through two segments, Potash and Trio. The Potash segment offers muriate of potash or potassium chloride for use as a fertilizer input in the agricultural market; as a component in drilling and fracturing fluids for oil and gas wells, as well as an input to other industrial processes in the industrial market; and as a nutrient supplement in the animal feed market. The Trio segment provides Trio, a specialty fertilizer that delivers potassium, sulfate, and magnesium in a single particle. The company also sells water for use in the oil and gas services industry. In addition, it offers salt for use in animal feeds, industrial applications, pool salts, and treatment of roads and walkways; magnesium chloride for use in the deicing and dedusting of roads; brines for well development and completion applications in the oil and gas industry; and metal recovery salt, a combination of potash and salt to enhance the recovery of aluminum in the aluminum recycling processing facilities. Intrepid Potash, Inc. was founded in 2000 and is based in Denver, Colorado.

About Smart Sand

Smart Sand, Inc. engages in the excavation, processing, and sale of industrial sands for use in hydraulic fracturing operations in the oil and gas industry in the United States. The company sells its products primarily to oil and natural gas exploration and production companies, and oilfield service companies. As of December 31, 2017, it had approximately 321 million tons of proven recoverable sand reserves. The company was incorporated in 2011 and is headquartered in The Woodlands, Texas.

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