Critical Comparison: Sensient Technologies (NYSE:SXT) and Gulf Resources (NASDAQ:GURE)

Sensient Technologies (NYSE:SXT) and Gulf Resources (NASDAQ:GURE) are both materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, risk, profitability and valuation.

Insider & Institutional Ownership

90.9% of Sensient Technologies shares are owned by institutional investors. Comparatively, 3.3% of Gulf Resources shares are owned by institutional investors. 1.3% of Sensient Technologies shares are owned by company insiders. Comparatively, 7.7% of Gulf Resources shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Sensient Technologies and Gulf Resources, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sensient Technologies	0	2	3	0	2.60
Gulf Resources	1	0	0	0	1.00

Sensient Technologies currently has a consensus target price of $140.67, indicating a potential upside of 6.53%. Given Sensient Technologies’ stronger consensus rating and higher probable upside, research analysts plainly believe Sensient Technologies is more favorable than Gulf Resources.

Valuation & Earnings

This table compares Sensient Technologies and Gulf Resources”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sensient Technologies	N/A	N/A	N/A	$3.71	35.59
Gulf Resources	N/A	N/A	N/A	($29.52)	-0.10

Gulf Resources is trading at a lower price-to-earnings ratio than Sensient Technologies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Sensient Technologies and Gulf Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sensient Technologies	N/A	N/A	N/A
Gulf Resources	N/A	N/A	N/A

Summary

Sensient Technologies beats Gulf Resources on 6 of the 7 factors compared between the two stocks.

About Sensient Technologies

Sensient Technologies Corporation, together with its subsidiaries, develops, manufactures, and markets colors, flavors, and other specialty ingredients in North America, Europe, Asia, Australia, South America, and Africa. The company offers flavor-delivery systems, and compounded and blended products; ingredient products, such as essential oils, natural and synthetic flavors, and natural extracts; and chili powder, paprika, and chili pepper, as well as dehydrated vegetables comprising parsley, celery, and spinach to the food, beverage, and personal care industries. It also provides natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, including colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications under the Sensient Food Colors, Sensient Pharmaceutical Coating Systems, Sensient Cosmetic Technologies, and Sensient Specialty Markets trade names. Sensient Technologies Corporation was incorporated in 1882 and is headquartered in Milwaukee, Wisconsin.

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.