Critical Survey: Gulf Resources (NASDAQ:GURE) versus Tosoh (OTCMKTS:TOSCF)

Gulf Resources (NASDAQ:GURE) and Tosoh (OTCMKTS:TOSCF) are both basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Profitability

This table compares Gulf Resources and Tosoh’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gulf Resources	-286.77%	-20.62%	-17.50%
Tosoh	4.01%	6.67%	4.49%

Institutional and Insider Ownership

3.3% of Gulf Resources shares are held by institutional investors. 3.2% of Gulf Resources shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Gulf Resources has a beta of -0.36, meaning that its stock price is 136% less volatile than the S&P 500. Comparatively, Tosoh has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Gulf Resources and Tosoh, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gulf Resources	1	0	0	0	1.00
Tosoh	0	0	0	0	0.00

Valuation and Earnings

This table compares Gulf Resources and Tosoh”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gulf Resources	$7.66 million	0.99	-$58.94 million	($48.05)	-0.10
Tosoh	$6.78 billion	0.75	$276.45 million	$0.87	18.39

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

Summary

Tosoh beats Gulf Resources on 8 of the 12 factors compared between the two stocks.

About Gulf Resources

Gulf Resources, Inc., through its subsidiaries, manufactures and trades bromine and crude salt, chemical products, and natural gas in the People’s Republic of China. The company operates through four segments: Bromine, Crude salt, Chemical products, and Natural gas segments. It also provides bromine for use in bromine compounds, intermediates in organic synthesis, brominated flame retardants, fumigants, water purification compounds, dyes, medicines, and disinfectants. In addition, the company offers crude salt for use as a material in alkali and chlorine alkali production for use in the chemical, food and beverage, and other industries. In addition, it manufactures and sells chemical products for use in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, and inorganic chemicals, as well as materials that are used for human and animal antibiotics. The company is based in Shouguang, the People’s Republic of China.

About Tosoh

Tosoh Corporation manufactures and sells basic chemicals, petrochemicals, specialty products, and fine chemicals worldwide. It operates through four segments: Petrochemical, Chlor-Alkali, Specialty, and Engineering. The company provides advance materials, including battery, fabricated quartzware, silica glass, thin film depositions, zeolites for catalysts and molecular sieves, zirconia injection mold components and compounds, zirconia grinding and dispersion media, and zirconia fine beads and powders. It also offers chromatographic columns, and media and diagnostic systems; clinical diagnostic systems; Portland cement and blast-furnace slag cement; and caustic soda, vinyl chloride monomer, calcium hypochlorite, and sodium bicarbonate. In addition, the company provides ethylene, propylene, C4 fraction, tertiary butyl alcohol, cumene, and aromatic compounds; and ethyleneamines, bromine, hydrobromic acids, flame retardants, non-aqueous solvents, chelating agents, ethylene dichloride, and sodium styrenesulfonate. Further, it offers polymers, such as ethylene vinyl-acetate copolymers, adhesive polymers, low and high-density polyethylene products, synthetic rubbers, functional polymers, and polyvinyl chloride pastes; and polyurethanes (PU), including methylene diphenyl diisocyanate, toluene diisocyanate, hexamethylene diisocyanate, adhesives, coating resins, elastomers, polyisocyanates for PU paints, and polyols. The company manufactures and sells water treatment systems; and engages in the construction and repair businesses. It serves chemical and petrochemical, construction, automotive, consumer electronics, information technology, bioscience, and environmental markets. The company was incorporated in 1935 and is headquartered in Tokyo, Japan.