Hi-Crush Partners (NYSE: HCLP) and Ferroglobe PLC (NASDAQ:GSM) are both small-cap basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, earnings, valuation, risk, dividends and analyst recommendations.

Earnings and Valuation

This table compares Hi-Crush Partners and Ferroglobe PLC’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hi-Crush Partners $235.65 million 4.06 -$1.78 million ($0.65) -16.15
Ferroglobe PLC $1.53 billion 1.17 $32.76 million ($0.69) -15.14

Ferroglobe PLC has higher revenue and earnings than Hi-Crush Partners. Hi-Crush Partners is trading at a lower price-to-earnings ratio than Ferroglobe PLC, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

64.4% of Hi-Crush Partners shares are owned by institutional investors. Comparatively, 40.3% of Ferroglobe PLC shares are owned by institutional investors. 34.8% of Hi-Crush Partners shares are owned by company insiders. Comparatively, 13.1% of Ferroglobe PLC shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Ferroglobe PLC pays an annual dividend of $0.24 per share and has a dividend yield of 2.3%. Hi-Crush Partners does not pay a dividend. Ferroglobe PLC pays out -34.8% of its earnings in the form of a dividend. Ferroglobe PLC has raised its dividend for 4 consecutive years.

Profitability

This table compares Hi-Crush Partners and Ferroglobe PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hi-Crush Partners -15.15% -9.38% -5.74%
Ferroglobe PLC -7.60% -3.96% -1.94%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Hi-Crush Partners and Ferroglobe PLC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hi-Crush Partners 0 0 8 0 3.00
Ferroglobe PLC 0 1 5 0 2.83

Hi-Crush Partners presently has a consensus target price of $23.14, indicating a potential upside of 120.41%. Ferroglobe PLC has a consensus target price of $13.05, indicating a potential upside of 24.88%. Given Hi-Crush Partners’ stronger consensus rating and higher possible upside, equities analysts plainly believe Hi-Crush Partners is more favorable than Ferroglobe PLC.

Risk & Volatility

Hi-Crush Partners has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Ferroglobe PLC has a beta of 1.83, indicating that its stock price is 83% more volatile than the S&P 500.

Summary

Ferroglobe PLC beats Hi-Crush Partners on 9 of the 16 factors compared between the two stocks.

About Hi-Crush Partners

Hi-Crush Partners LP is an integrated producer, transporter, marketer and distributor of monocrystalline sand, a specialized mineral that is used as a proppant to manage the recovery rates of hydrocarbons from oil and natural gas wells. Its reserves consist of northern white sand, a resource in Wisconsin and limited portions of the upper Midwest region of the United States. It owns and operates a portfolio of sand facilities with on-site wet and dry plant assets, including direct access to the United States railroads for distribution to in-basin terminals. It owns and operates a network of strategically located terminals and an integrated distribution system throughout North America, including its PropStream integrated logistics solution, which delivers proppant into the blender at the well site. The Company’s Blair facility, as of December 31, 2016, contained 117.7 million tons of proven recoverable reserves of frac sand meeting API specifications.

About Ferroglobe PLC

Ferroglobe PLC, formerly VeloNewco Limited, is engaged in silicon and specialty metals industry. The Company produces silicon metal and silicon- and manganese-based alloy, which serves customers in the chemical, aluminum, solar, steel and ductile iron foundry industries. It operates through two segments: Electrometallurgy and Energy. It Electrometallurgy segment includes its coal and quartz mining operations and its silicon metal and ferroalloy production, whereas the Energy segment consists of its hydroelectric power operations. It currently operates approximately 20 production smelting facilities in the field of electrometallurgy: approximately five in Spain, over five in the United States of America, over six in France, over three in South Africa, one in Venezuela, one in Poland, one in Canada, one in Argentina and one in China. It diversifies its production base across approximately five continents, such as Africa, Asia, Europe, North America and South America.

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