Critical Contrast: Kraton Corporation (KRA) and Trinseo (TSE)
Kraton Corporation (NYSE: KRA) and Trinseo (NYSE:TSE) are both specialty chemicals – nec companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.
Trinseo pays an annual dividend of $1.44 per share and has a dividend yield of 2.1%. Kraton Corporation does not pay a dividend. Trinseo pays out 22.5% of its earnings in the form of a dividend.
This table compares Kraton Corporation and Trinseo’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
95.4% of Kraton Corporation shares are held by institutional investors. Comparatively, 94.9% of Trinseo shares are held by institutional investors. 5.0% of Kraton Corporation shares are held by company insiders. Comparatively, 0.3% of Trinseo shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Kraton Corporation and Trinseo’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Kraton Corporation||$1.74 billion||0.85||$107.30 million||$0.77||61.44|
|Trinseo||$3.72 billion||0.83||$318.31 million||$6.39||10.99|
Trinseo has higher revenue and earnings than Kraton Corporation. Trinseo is trading at a lower price-to-earnings ratio than Kraton Corporation, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Kraton Corporation has a beta of 1.21, suggesting that its share price is 21% more volatile than the S&P 500. Comparatively, Trinseo has a beta of 2.36, suggesting that its share price is 136% more volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Kraton Corporation and Trinseo, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Kraton Corporation presently has a consensus price target of $60.00, suggesting a potential upside of 26.82%. Trinseo has a consensus price target of $76.25, suggesting a potential upside of 8.62%. Given Kraton Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Kraton Corporation is more favorable than Trinseo.
Trinseo beats Kraton Corporation on 9 of the 16 factors compared between the two stocks.
About Kraton Corporation
Kraton Corporation, formerly Kraton Performance Polymers, Inc., is a specialty chemicals company. The Company manufactures styrenic block copolymers (SBCs) and other engineered polymers. The Company also produces specialty products primarily derived from pine wood pulping co-products. The Company operates through two segments: Polymer Segment, which comprises SBCs and other engineered polymers business, and Chemical Segment, which comprises pine-based specialty products business. Its SBCs are used in a range of applications, including adhesives, coatings, consumer and personal care products, sealants, lubricants, medical, packaging, automotive, paving, roofing and footwear products. The Company also sells isoprene rubber (IR) and isoprene rubber latex (IRL), which are non-SBC products primarily used in applications, such as medical products, personal care, adhesives, tackifiers, paints and coatings. It offers crude tall oil (CTO) and crude sulfate turpentine (CST).
Trinseo S.A. is a materials company engaged in the manufacture and marketing of synthetic rubber, latex and plastics. The Company’s segments include Latex Binders, Synthetic Rubber, Performance Plastics, Basic Plastics, Feedstocks and Americas Styrenics. The Latex Binders segment produces styrene-butadiene latex (SB latex) and other latex polymers and binders. The Synthetic Rubber segment produces synthetic rubber products used in tires, impact modifiers and technical rubber products. The Performance Plastics segment produces compounds and blends and specialized acrylonitrile-butadiene-styrene (ABS) grades. The Basic Plastics segment produces styrenic polymers, including polystyrene, basic ABS, and styrene-acrylonitrile (SAN) products, as well as polycarbonate (PC). The Feedstocks segment includes its production and procurement of styrene monomer outside of North America. The Americas Styrenics segment consists of the operations of its joint venture, Americas Styrenics LLC.
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