Reviewing Enlightify (NYSE:ENFY) and Stepan (NYSE:SCL)

Stepan (NYSE:SCL) and Enlightify (NYSE:ENFY) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Profitability

This table compares Stepan and Enlightify’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stepan	1.96%	3.70%	1.88%
Enlightify	-22.98%	-18.78%	-11.03%

Analyst Recommendations

This is a summary of recent recommendations for Stepan and Enlightify, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stepan	1	1	0	0	1.50
Enlightify	1	0	0	0	1.00

Risk & Volatility

Stepan has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, Enlightify has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

82.7% of Stepan shares are owned by institutional investors. Comparatively, 0.1% of Enlightify shares are owned by institutional investors. 6.9% of Stepan shares are owned by company insiders. Comparatively, 14.2% of Enlightify shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Stepan and Enlightify”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stepan	$2.18 billion	0.54	$50.37 million	$1.98	26.23
Enlightify	$79.21 million	0.01	-$28.41 million	($0.86)	-0.05

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

Summary

Stepan beats Enlightify on 11 of the 12 factors compared between the two stocks.

About Stepan

Stepan Company, together with its subsidiaries, produces and sells specialty and intermediate chemicals to other manufacturers for use in various end products worldwide. It operates through three segments: Surfactants, Polymers, and Specialty Products. The Surfactants segment offers surfactants that are used in consumer and industrial cleaning and disinfection products, including detergents for washing clothes, dishes, carpets, and floors and walls, as well as shampoos and body washes; and other applications, such as fabric softeners, germicidal quaternary compounds, disinfectants, and lubricating ingredients. Its surfactants are also used in various applications, including emulsifiers for spreading agricultural products; and industrial applications comprising latex systems, plastics, and composites. The Polymers segment provides polyurethane polyols that are used in the manufacture of rigid foam for thermal insulation in the construction industry, as well as a base raw material for coatings, adhesives, sealants, and elastomers (CASE); polyester resins, including liquid and powdered products, which are used in CASE applications; and phthalic anhydride that is used in unsaturated polyester resins, alkyd resins, and plasticizers for applications in construction materials, as well as components of automotive, boating, and other consumer products. The Specialty Products segment offers flavors, emulsifiers, and solubilizers for use in food, flavoring, nutritional supplement, and pharmaceutical applications. Stepan Company was founded in 1932 and is headquartered in Northbrook, Illinois.

About Enlightify

Enlightify, Inc. engages in the research, development, production, and sale of various types of fertilizers and agricultural products. It operates through the following segments: Jinong, Gufeng, and Yuxing. The Jinong segment includes fertilizer products, with focus on humic acid-based compound fertilizer. The Gufeng segment refers to the compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizers, highly concentrated water-soluble fertilizers, and mixed organic-inorganic compound fertilizer. The Yuxing segment develops and produces agricultural products, such as top-grade fruits, vegetables, flowers, and colored seedlings. The company was founded by Tao Li on February 6, 1987 and is headquartered in Xi’an, China.