Financial Survey: Tronox (NYSE:TROX) and Origin Materials (NASDAQ:ORGN)

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

Volatility and Risk

Origin Materials has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Tronox has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500.

Earnings and Valuation

This table compares Origin Materials and Tronox”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Origin Materials	$13.97 million	0.37	-$249.70 million	($47.83)	-0.02
Tronox	$3.06 billion	0.22	-$470.00 million	($3.46)	-1.23

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Origin Materials and Tronox, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Origin Materials	1	0	0	0	1.00
Tronox	4	4	1	0	1.67

Tronox has a consensus price target of $7.08, suggesting a potential upside of 66.08%. Given Tronox’s stronger consensus rating and higher possible upside, analysts plainly believe Tronox is more favorable than Origin Materials.

Dividends

Origin Materials pays an annual dividend of $0.32 per share and has a dividend yield of 33.7%. Tronox pays an annual dividend of $0.20 per share and has a dividend yield of 4.7%. Origin Materials pays out -0.7% of its earnings in the form of a dividend. Tronox pays out -5.8% 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.

Insider and Institutional Ownership

29.9% of Origin Materials shares are held by institutional investors. Comparatively, 73.4% of Tronox shares are held by institutional investors. 2.8% of Origin Materials shares are held by insiders. Comparatively, 2.0% of Tronox shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Origin Materials and Tronox’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Origin Materials	-1,742.04%	-120.66%	-99.50%
Tronox	-17.96%	-24.34%	-5.51%

Summary

Tronox beats Origin Materials on 10 of the 16 factors compared between the two stocks.

About Origin Materials

Origin Materials, Inc., together with its subsidiaries, operates as a carbon-negative materials company. The company develops a proprietary biomass conversion platform to convert biomass, or plant-based carbon into building block chemicals chloromethylfurfural and hydrothermal carbon, as well as other oils and extractives and other co-products. Origin Materials, Inc. is headquartered in West Sacramento, California.

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.