Trinseo (NYSE:TSE) & RPM International (NYSE:RPM) Critical Review

RPM International (NYSE:RPM) and Trinseo (NYSE:TSE) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Valuation and Earnings

This table compares RPM International and Trinseo”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RPM International	$7.52 billion	1.99	$688.69 million	$5.35	21.82
Trinseo	$3.51 billion	0.02	-$348.50 million	($10.97)	-0.21

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for RPM International and Trinseo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RPM International	0	7	5	1	2.54
Trinseo	1	0	0	0	1.00

RPM International currently has a consensus target price of $131.00, suggesting a potential upside of 12.24%. Given RPM International’s stronger consensus rating and higher possible upside, equities analysts plainly believe RPM International is more favorable than Trinseo.

Volatility & Risk

RPM International has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, Trinseo has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500.

Dividends

RPM International pays an annual dividend of $2.16 per share and has a dividend yield of 1.9%. Trinseo pays an annual dividend of $0.04 per share and has a dividend yield of 1.7%. RPM International pays out 40.4% of its earnings in the form of a dividend. Trinseo pays out -0.4% 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. RPM International has raised its dividend for 51 consecutive years and Trinseo has raised its dividend for 1 consecutive years. RPM International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares RPM International and Trinseo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RPM International	9.16%	24.22%	9.46%
Trinseo	-11.96%	N/A	-10.21%

Institutional & Insider Ownership

80.9% of RPM International shares are owned by institutional investors. Comparatively, 82.7% of Trinseo shares are owned by institutional investors. 1.6% of RPM International shares are owned by company insiders. Comparatively, 4.5% of Trinseo shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

RPM International beats Trinseo on 14 of the 18 factors compared between the two stocks.

About RPM International

RPM International Inc. manufactures and sells specialty chemicals for the industrial, specialty, and consumer markets worldwide. It offers waterproofing, coating, and traditional roofing systems; sealants, air barriers, tapes, and foams; residential home weatherization systems; roofing and building maintenance services; sealing and bonding, subfloor preparation, flooring, and glazing solutions; resin flooring systems, polyurethane, MMA waterproof, epoxy floor paint and coatings, concrete repair, and protection products; fire stopping and intumescent steel coating, and manufacturing industry solutions; rolled asphalt roofing materials and chemical admixtures; concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps, and restoration materials; insulated building cladding materials; and concrete form wall systems. It also provides polymer flooring systems; fiberglass reinforced plastic gratings and shapes; corrosion-control coating, containment and railcar lining, fire and sound proofing, and heat and cryogenic insulation products; specialty construction products; amine curing agents, reactive diluents, and epoxy resins; fluorescent colorants and pigments; shellac-based-specialty and marine coatings; fire and water damage restoration, carpet cleaning, and disinfecting products; fuel additives; wood treatments, coatings, and touch-up products; and nail enamels, polishes, and coating components. In addition, it offers solutions for the paint contractors and DIYers, concrete restoration and flooring, metallic and faux finish coatings, cleaners, and hobby paints and cements; and caulks, adhesives, insulating foams, and patches, as well as spackling, glazing, and repair products. The company was incorporated in 1947 and is headquartered in Medina, Ohio.

About Trinseo

Trinseo PLC operates as a specialty material solutions provider in the United States, Europe, the Asia-Pacific, and internationally. It operates through five segments: Engineered Materials, Latex Binders, Plastics Solutions, Polystyrene, and Americas Styrenics. The Engineered Materials segment offers rigid thermoplastic compounds and blends, soft thermoplastic, continuous cast, cell cast, activated methyl methacrylates (MMA), PMMA resins, and extruded PMMA sheets and resins for consumer electronics, medical, footwear, automotive, and building and construction applications under the EMERGE, CALIBRE, PLEXIGLAS, ALTUGLAS, ACRYSPA, AVONITE, STUDIO, MEGOL, APILON, APIGO, and APINAT brands. The Latex Binders segment provides styrene-butadiene latex, and other latex polymers and binders primarily for coated paper and packaging board, carpet, and artificial turf backings, as well as the adhesive, building and construction, and technical textile paper market. The Plastics Solutions segment offers acrylonitrile-butadiene-styrene, styrene-acrylonitrile, polycarbonate, and compounds and blends for automotive and other applications under the MAGNUM brand. The Polystyrene segment provides general purpose polystyrenes and high impact polystyrene for use in appliances, food packaging and food service disposables, consumer electronics, and building and construction materials under the STYRON brand. The Americas Styrenics segment provides styrene and polystyrene for appliances, food packaging, food service disposables, consumer electronics, and building and construction materials applications. Trinseo PLC was incorporated in 2015 and is headquartered in Wayne, Pennsylvania.