Reviewing Element Solutions (NYSE:ESI) & Novozymes A/S (OTCMKTS:NVZMY)

Element Solutions (NYSE:ESI) and Novozymes A/S (OTCMKTS:NVZMY) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.

Dividends

Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Novozymes A/S pays an annual dividend of $0.81 per share and has a dividend yield of 1.2%. Element Solutions pays out 51.6% of its earnings in the form of a dividend. Novozymes A/S pays out 54.7% 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.

Volatility & Risk

Element Solutions has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Novozymes A/S has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Valuation & Earnings

This table compares Element Solutions and Novozymes A/S”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Element Solutions	$2.80 billion	3.32	$190.80 million	$0.62	61.55
Novozymes A/S	$4.70 billion	5.77	$660.28 million	$1.48	44.23

Novozymes A/S has higher revenue and earnings than Element Solutions. Novozymes A/S is trading at a lower price-to-earnings ratio than Element Solutions, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

92.3% of Element Solutions shares are owned by institutional investors. Comparatively, 0.0% of Novozymes A/S shares are owned by institutional investors. 6.2% of Element Solutions shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Element Solutions and Novozymes A/S’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Element Solutions	5.32%	14.19%	7.30%
Novozymes A/S	14.22%	6.52%	4.30%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Element Solutions and Novozymes A/S, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Element Solutions	0	3	5	3	3.00
Novozymes A/S	0	1	0	2	3.33

Element Solutions presently has a consensus target price of $43.00, indicating a potential upside of 12.68%. Given Element Solutions’ higher probable upside, equities analysts clearly believe Element Solutions is more favorable than Novozymes A/S.

Summary

Element Solutions beats Novozymes A/S on 10 of the 17 factors compared between the two stocks.

About Element Solutions

Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies surface mount technologies, fluxes, thermal management material, coatings, and other attachment materials; chemical formulations to the electronics industry; and advanced copper interconnects, die attachment, sintered silver material, adhesives, wafer bump processes, and photomask technologies for semiconductor industry. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.

About Novozymes A/S

Novozymes A/S produces and sells industrial enzymes, microorganisms, and probiotics in Denmark, rest of Europe, North America, Asia Pacific, the Middle East, Africa, Latin America, and internationally. The company offers protein solutions for the food and beverage industry. It also offers industrial hygiene, drain openers, hard surface, medical cleaning, septic tanks, ware washing, and professional laundry services. In addition, the company provides dishwashing, softener, microbial and medical cleaning services. Further, it provides corn, cotton, forages, peanuts, pulses, soybeans, wheat, small grains, bioyield, and biocontrol solutions; warm water species, recirculating aquaculture system; animal health and nutrition solutions; fiber modification, bleach boosting, deposit control, and starch modification solutions. Additionally, the company provides carbon capture, leather and textiles solutions; enzyme solutions, including corn and wheat separation, liquefaction, saccharification, filtration, isomerization, maltose, and specialties solutions; warm water species and recirculating aquaculture system solutions; human health solutions, comprising brain, oral, protective and immune, and gastrointestinal health solutions; ethanol, biodiesel, renewable diesel, education, wastewater, and sewage sludge, and renewable diesel solutions; agriculture and industry, biogas food waste, food waste, biocatalysis, cell culture, diagnostics, enzyme, and biogas solutions. Furthermore, it provides lipases, proteases, oxidoreductases, and carbohydrases. Novozymes A/S was founded in 1925 and is based in Bagsvaerd, Denmark.