Critical Comparison: Minerals Technologies (NYSE:MTX) & Element Solutions (NYSE:ESI)

Element Solutions (NYSE:ESI) and Minerals Technologies (NYSE:MTX) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Insider & Institutional Ownership

92.3% of Element Solutions shares are held by institutional investors. Comparatively, 97.3% of Minerals Technologies shares are held by institutional investors. 6.9% of Element Solutions shares are held by company insiders. Comparatively, 3.3% of Minerals Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Element Solutions and Minerals Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Element Solutions	9.58%	14.01%	7.28%
Minerals Technologies	-0.08%	10.69%	5.31%

Analyst Recommendations

This is a summary of recent ratings and target prices for Element Solutions and Minerals Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Element Solutions	0	3	6	2	2.91
Minerals Technologies	2	0	1	0	1.67

Element Solutions presently has a consensus price target of $30.75, indicating a potential upside of 22.12%. Minerals Technologies has a consensus price target of $84.00, indicating a potential upside of 36.72%. Given Minerals Technologies’ higher possible upside, analysts plainly believe Minerals Technologies is more favorable than Element Solutions.

Earnings & Valuation

This table compares Element Solutions and Minerals Technologies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Element Solutions	$2.46 billion	2.48	$244.20 million	$0.99	25.43
Minerals Technologies	$2.12 billion	0.90	$167.10 million	($0.02)	-3,071.95

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

Dividends

Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. Minerals Technologies pays an annual dividend of $0.48 per share and has a dividend yield of 0.8%. Element Solutions pays out 32.3% of its earnings in the form of a dividend. Minerals Technologies pays out -2,400.0% 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. Minerals Technologies has raised its dividend for 2 consecutive years.

Risk and Volatility

Element Solutions has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, Minerals Technologies has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.

Summary

Element Solutions beats Minerals Technologies on 14 of the 18 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 Minerals Technologies

Minerals Technologies Inc. develops, produces, and markets various mineral, mineral-based, and related systems and services. The company operates through two segments, Consumer & Specialties, and Engineered Solutions segments. The Consumer & Specialties segment offers household and personal care products, such as pet litter, personal care, fabric care, edible oil and other fluid purification, animal health, and agricultural products; and specialty additives products, including precipitated calcium carbonate and ground calcium carbonate products that are used in the paper, paperboard, and fiber based packaging industries, as well as automotive, construction, and table and food applications. This segment produces limestone and dolomitic limestone used in construction, automotive, and consumer markets for packaging applications. The Engineered Solutions segment provides high-temperature technology products consisting of custom-blended mineral and non-mineral products for casting auto parts, farm and construction equipment, oil and gas production equipment, power generation turbine castings, and rail car components; and environmental and infrastructure products comprising geosynthetic clay lining systems, vapor intrusion mitigation products, sub surface waterproofing systems, green roofs, wastewater remediation, drinking water purification technologies, and drilling products. In addition, this segment provides chromite products; gunnable monolithic refractory products and application systems; monolithic refractory materials and pre-cast refractory shapes; refractory shapes and linings; carbon composite and pyrolitic graphite; and filtration and well testing services. It markets its products primarily through its direct sales force, as well as regional distributors. The company serves in the United States, Canada, Latin America, Europe, Africa, and Asia. Minerals Technologies Inc. was incorporated in 1968 and is headquartered in New York, New York.