Financial Contrast: Hawkins (NASDAQ:HWKN) versus Tronox (NYSE:TROX)

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

Valuation & Earnings

This table compares Tronox and Hawkins”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tronox	$2.90 billion	0.33	-$470.00 million	($3.46)	-1.72
Hawkins	$1.08 billion	2.52	$81.55 million	$3.86	33.95

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

Insider & Institutional Ownership

73.4% of Tronox shares are owned by institutional investors. Comparatively, 69.7% of Hawkins shares are owned by institutional investors. 2.0% of Tronox shares are owned by company insiders. Comparatively, 3.7% of Hawkins shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility & Risk

Tronox has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Hawkins has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Dividends

Tronox pays an annual dividend of $0.20 per share and has a dividend yield of 3.4%. Hawkins pays an annual dividend of $0.76 per share and has a dividend yield of 0.6%. Tronox pays out -5.8% of its earnings in the form of a dividend. Hawkins pays out 19.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hawkins has increased its dividend for 20 consecutive years. Tronox is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Tronox	-17.96%	-24.34%	-5.51%
Hawkins	7.29%	15.42%	8.22%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Tronox and Hawkins, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tronox	4	4	2	0	1.80
Hawkins	1	2	1	0	2.00

Tronox currently has a consensus price target of $6.93, suggesting a potential upside of 16.29%. Hawkins has a consensus price target of $171.00, suggesting a potential upside of 30.48%. Given Hawkins’ stronger consensus rating and higher probable upside, analysts clearly believe Hawkins is more favorable than Tronox.

Summary

Hawkins beats Tronox on 11 of the 17 factors compared between the two stocks.

About Tronox

Tronox Holdings plc operates as a vertically integrated manufacturer of TiO2 pigment in North America, South and Central America, Europe, the Middle East, Africa, and the Asia Pacific. The company operates titanium-bearing mineral sand mines; and engages in beneficiation and smelting operations. It offers TiO2 pigment; ultrafine specialty TiO2; zircon; feedstock; pig iron; monazite; titanium tetrachloride; and other products. The company’s products are used for the manufacture of paints, coatings, plastics, and paper, as well as various other applications. Tronox Holdings plc is based in Stamford, Connecticut.

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.