Comparing Albemarle (NYSE:ALB) & Tronox (NYSE:TROX)

Albemarle (NYSE:ALB) and Tronox (NYSE:TROX) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, analyst recommendations, institutional ownership, profitability, dividends and valuation.

Risk & Volatility

Albemarle has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, Tronox has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Albemarle	-18.61%	-1.87%	-0.89%
Tronox	-8.48%	-4.83%	-1.40%

Institutional & Insider Ownership

92.9% of Albemarle shares are owned by institutional investors. Comparatively, 73.4% of Tronox shares are owned by institutional investors. 0.3% of Albemarle shares are owned by company insiders. Comparatively, 1.7% of Tronox shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Albemarle pays an annual dividend of $1.62 per share and has a dividend yield of 2.0%. Tronox pays an annual dividend of $0.20 per share and has a dividend yield of 4.1%. Albemarle pays out -17.4% of its earnings in the form of a dividend. Tronox pays out -12.7% 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. Albemarle has raised its dividend for 30 consecutive years.

Valuation & Earnings

This table compares Albemarle and Tronox”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Albemarle	$5.38 billion	1.77	-$1.18 billion	($9.32)	-8.69
Tronox	$3.07 billion	0.25	-$48.00 million	($1.58)	-3.12

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

Analyst Recommendations

This is a summary of recent recommendations for Albemarle and Tronox, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Albemarle	4	10	3	0	1.94
Tronox	2	2	5	0	2.33

Albemarle presently has a consensus target price of $86.47, indicating a potential upside of 6.79%. Tronox has a consensus target price of $5.01, indicating a potential upside of 1.54%. Given Albemarle’s higher probable upside, analysts clearly believe Albemarle is more favorable than Tronox.

Summary

Albemarle beats Tronox on 9 of the 17 factors compared between the two stocks.

About Albemarle

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments: Energy Storage, Specialties and Ketjen. The Energy Storage segment offers lithium compounds, including lithium carbonate, lithium hydroxide, and lithium chloride; technical services for the handling and use of reactive lithium products; and lithium-containing by-products recycling services. The Specialties segment provides bromine-based specialty chemicals, including elemental bromine, alkyl and inorganic bromides, brominated powdered activated carbon, and other bromine fine chemicals; lithium specialties, such as butyllithium and lithium aluminum hydride; develops and manufactures cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for pyrotechnical applications that include airbag initiators. The Ketjen segment offers clean fuels technologies (CFT), which is composed of hydroprocessing catalysts (HPC) together with isomerization and akylation catalysts; fluidized catalytic cracking (FCC) catalysts and additives; and performance catalyst solutions (PCS), which is composed of organometallics and curatives. The company serves the energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, and crop protection markets. Albemarle Corporation was founded in 1887 and is headquartered in Charlotte, North Carolina.

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.