Analyzing Westaim (OTCMKTS:WEDXF) and Hawkins (NASDAQ:HWKN)

Hawkins (NASDAQ:HWKN) and Westaim (OTCMKTS:WEDXF) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Volatility and Risk

Hawkins has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Westaim has a beta of 0.24, indicating that its share price is 76% less volatile than the S&P 500.

Valuation and Earnings

This table compares Hawkins and Westaim”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hawkins	$974.43 million	3.00	$84.35 million	$4.04	34.77
Westaim	$17.04 million	44.69	-$16.18 million	($2.17)	-10.46

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

Profitability

This table compares Hawkins and Westaim’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hawkins	8.66%	18.93%	11.76%
Westaim	-253.76%	-9.36%	-8.82%

Insider & Institutional Ownership

69.7% of Hawkins shares are held by institutional investors. 3.8% of Hawkins shares are held by insiders. Comparatively, 4.2% of Westaim shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Hawkins and Westaim, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hawkins	0	0	2	0	3.00
Westaim	0	0	0	0	0.00

Hawkins presently has a consensus price target of $142.50, suggesting a potential upside of 1.44%. Given Hawkins’ stronger consensus rating and higher possible upside, equities analysts plainly believe Hawkins is more favorable than Westaim.

Summary

Hawkins beats Westaim on 12 of the 14 factors compared between the two stocks.

About Hawkins

Hawkins, Inc. operates as a specialty chemical and ingredients company in the United States. It operates through three segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment offers industrial chemicals, products, and services to agriculture, chemical processing, electronics, energy, food, pharmaceutical, and plating industries. This segment manufactures sodium hypochlorite and agricultural products, as well as various food-grade and pharmaceutical products, such as liquid phosphates, lactates, other blended products, and agricultural products; and receives, stores, and distributes various chemicals comprising liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia, and potassium hydroxide. It also repackages water treatment chemicals and bulk industrial chemicals; and performs custom blending of chemicals. The Water Treatment segment provides chemicals, products, equipment, services, and solutions for potable water, municipal and industrial wastewater, industrial process water, non-residential swimming pool water, and agriculture water. The Health and Nutrition segment offers ingredient distribution, processing, and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products. Its products portfolio includes minerals, vitamins and amino acids, excipients, joint products, botanicals and herbs, sweeteners, and enzymes. Hawkins, Inc. was founded in 1938 and is headquartered in Roseville, Minnesota.

About Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.