Ashland (NYSE:ASH) versus Mativ (NYSE:MATV) Financial Analysis

Mativ (NYSE:MATV) and Ashland (NYSE:ASH) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Mativ and Ashland, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mativ	1	1	1	0	2.00
Ashland	2	3	5	0	2.30

Mativ presently has a consensus price target of $10.00, suggesting a potential downside of 20.94%. Ashland has a consensus price target of $65.13, suggesting a potential upside of 4.25%. Given Ashland’s stronger consensus rating and higher probable upside, analysts plainly believe Ashland is more favorable than Mativ.

Risk and Volatility

Mativ has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Ashland has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.

Profitability

This table compares Mativ and Ashland’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mativ	-22.03%	7.06%	1.73%
Ashland	-46.25%	7.07%	3.21%

Institutional and Insider Ownership

95.0% of Mativ shares are owned by institutional investors. Comparatively, 94.0% of Ashland shares are owned by institutional investors. 1.0% of Mativ shares are owned by insiders. Comparatively, 1.3% of Ashland shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Mativ pays an annual dividend of $0.40 per share and has a dividend yield of 3.2%. Ashland pays an annual dividend of $1.66 per share and has a dividend yield of 2.7%. Mativ pays out -5.0% of its earnings in the form of a dividend. Ashland pays out -9.0% 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. Mativ has increased its dividend for 1 consecutive years and Ashland has increased its dividend for 16 consecutive years.

Valuation and Earnings

This table compares Mativ and Ashland”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mativ	$1.98 billion	0.35	-$48.70 million	($8.03)	-1.58
Ashland	$1.82 billion	1.57	-$845.00 million	($18.35)	-3.40

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

Summary

Ashland beats Mativ on 9 of the 17 factors compared between the two stocks.

About Mativ

Mativ Holdings, Inc., together with its subsidiaries, manufactures and sells specialty materials in the United States, Europe, the Asia Pacific, the Americas, and internationally. The company operates through two segments, Advanced Technical Materials and Fiber-Based Solutions. The Advanced Technical Materials manufactures and sells various engineered polymer, resin and fiber-based substrates, nets, films, adhesive tapes, and other nonwovens for the filtration, protective solutions, release liners, and healthcare end-markets. This segment sells its products directly, as well as through sales agents and distributors. The Fiber-Based Solutions segment produces packaging and specialty paper products. This segment provides premium packaging products that are used for wine, spirits and beer labels, folding cartons, box wrap, bags, hang tags, and stored value cards servicing retail, cosmetics, spirits, and electronics end-use markets; and premium papers, which are used in commercial printing services, advertising collateral, stationery, corporate identity packages and brochures, direct mail, business cards, and other uses. It also offers branded paper-based products for the consumer channel, such as bright papers, cardstock, stationery paper, envelopes, journals, and planners. This segment distributes its products through authorized paper distributors, converters, retailers, and specialty business converters, as well as directly to end-users. The company was formerly known as Schweitzer-Mauduit International, Inc. and changed its name to Mativ Holdings, Inc. in July 2022. Mativ Holdings, Inc. was incorporated in 1995 and is headquartered in Alpharetta, Georgia.

About Ashland

Ashland Inc. provides additives and specialty ingredients in the North and Latin America, Europe, Asia Pacific, and internationally. It operates through Life Sciences, Personal Care, Specialty Additives, and Intermediates segments. The Life Sciences segment offers pharmaceutical solutions, including controlled release polymers, disintegrants, tablet coatings, thickeners, solubilizers, and tablet binders; nutrition solutions, such as thickeners, stabilizers, emulsifiers, and additives; and nutraceutical solutions comprising products for weight management, joint comfort, stomach and intestinal health, sports nutrition, and general wellness, as well as custom formulation, toll processing, and particle engineering solutions. Its Personal Care segment provides a range of nature-based, biodegradable, and performance ingredients; solutions for toothpastes, mouth washes and rinses, denture cleaning, and care for teeth; and household supplies nature-derived rheology ingredients, biodegradable surface wetting agents, performance encapsulates, and specialty polymers. The Specialty Additives segment offers rheology modifiers, foam control agents, surfactants and wetting agents, pH neutralizers, advanced ceramics used in catalytic converters, environmental filters, ingredients for the manufacturing of ceramic capacitors, plasma display panels and solar cells, ingredients for textile printing, thermoplastic metals, and alloys for welding. Its Intermediates segment produces 1,4 butanediol and related derivatives, including n-methylpyrrolidone. It offers its products to customers in a range of consumer and industrial markets, such as architectural coatings, construction, energy, food and beverage, nutraceuticals, personal care, and pharmaceutical. The company was formerly known as Ashland Global Holdings Inc. and changed its name to Ashland Inc. in August 2022. Ashland Inc. was founded in 1924 and is headquartered in Wilmington, Delaware.