Analyzing Ashland (NYSE:ASH) and DAQO New Energy (NYSE:DQ)

DAQO New Energy (NYSE:DQ) and Ashland (NYSE:ASH) are both mid-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Insider & Institutional Ownership

47.2% of DAQO New Energy shares are owned by institutional investors. Comparatively, 93.9% of Ashland shares are owned by institutional investors. 24.3% of DAQO New Energy shares are owned by company insiders. Comparatively, 1.3% of Ashland shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

DAQO New Energy has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Ashland has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Valuation & Earnings

This table compares DAQO New Energy and Ashland”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DAQO New Energy	$1.03 billion	2.05	-$345.21 million	($5.14)	-6.11
Ashland	$1.82 billion	1.49	-$845.00 million	($18.35)	-3.23

DAQO New Energy has higher earnings, but lower revenue than Ashland. DAQO New Energy is trading at a lower price-to-earnings ratio than Ashland, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for DAQO New Energy and Ashland, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DAQO New Energy	1	2	3	1	2.57
Ashland	2	4	5	0	2.27

DAQO New Energy currently has a consensus price target of $27.04, suggesting a potential downside of 13.96%. Ashland has a consensus price target of $63.75, suggesting a potential upside of 7.48%. Given Ashland’s higher probable upside, analysts clearly believe Ashland is more favorable than DAQO New Energy.

Profitability

This table compares DAQO New Energy and Ashland’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DAQO New Energy	-53.74%	-5.89%	-5.42%
Ashland	-46.25%	7.07%	3.21%

Summary

Ashland beats DAQO New Energy on 8 of the 15 factors compared between the two stocks.

About DAQO New Energy

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.

About Ashland

Ashland Inc. provides additives and specialty ingredients in the North and Latin America, Europe, Asia Pacific, and internationally. It operates through Life Sciences, Personal Care, Specialty Additives, and Intermediates segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions. Its Personal Care segment provides a range of nature-based, biodegradable, and performance ingredients; solutions for toothpastes, mouth washes and rinses, denture cleaning, and care for teeth; and household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers. The Specialty Additives segment offers rheology modifiers, foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, environmental filters, ingredients for the manufacturing of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals, and alloys for welding. Its Intermediates segment produces 1,4 butanediol and related derivatives, including n-methylpyrrolidone. It offers its products to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical. The company was formerly known as Ashland Global Holdings Inc. and changed its name to Ashland Inc. in August 2022. Ashland Inc. was founded in 1924 and is headquartered in Wilmington, Delaware.