Critical Analysis: Avient (NYSE:AVNT) & Gulf Resources (NASDAQ:GURE)

Avient (NYSE:AVNT) and Gulf Resources (NASDAQ:GURE) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Valuation & Earnings

This table compares Avient and Gulf Resources”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avient	$3.24 billion	0.88	$169.50 million	$1.23	25.24
Gulf Resources	$20.72 million	0.28	-$58.94 million	($48.05)	-0.09

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Avient and Gulf Resources, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avient	0	5	4	1	2.60
Gulf Resources	1	0	0	0	1.00

Avient presently has a consensus price target of $42.50, suggesting a potential upside of 36.92%. Given Avient’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Avient is more favorable than Gulf Resources.

Risk & Volatility

Avient has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500. Comparatively, Gulf Resources has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500.

Institutional & Insider Ownership

95.5% of Avient shares are owned by institutional investors. Comparatively, 3.3% of Gulf Resources shares are owned by institutional investors. 0.9% of Avient shares are owned by insiders. Comparatively, 3.2% of Gulf Resources shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Avient and Gulf Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avient	3.49%	10.75%	4.25%
Gulf Resources	-286.77%	-20.62%	-17.50%

Summary

Avient beats Gulf Resources on 14 of the 15 factors compared between the two stocks.

About Avient

Avient Corporation operates as a formulator of material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in two segments, Color, Additives and Inks; and Specialty Engineered Materials. The Color, Additives and Inks segment offers custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, and specialty inks; custom-formulated liquid system, such as polyester, vinyl, natural rubber and latex, polyurethane, and silicone; and proprietary inks. Its products are used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable, recreational and athletic apparel, construction and filtration, outdoor furniture, healthcare, textiles and appliances, and industrial markets. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials. It sells its products through direct sales personnel, distributors, and commissioned sales agents. The company was formerly known as PolyOne Corporation and changed its name to Avient Corporation in June 2020. Avient Corporation was founded in 1885 and is headquartered in Avon Lake, Ohio.

About Gulf Resources

Gulf Resources, Inc., through its subsidiaries, manufactures and trades bromine and crude salt, chemical products, and natural gas in the People’s Republic of China. The company operates through four segments: Bromine, Crude salt, Chemical products, and Natural gas segments. It also provides bromine for use in bromine compounds, intermediates in organic synthesis, brominated flame retardants, fumigants, water purification compounds, dyes, medicines, and disinfectants. In addition, the company offers crude salt for use as a material in alkali and chlorine alkali production for use in the chemical, food and beverage, and other industries. In addition, it manufactures and sells chemical products for use in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, and inorganic chemicals, as well as materials that are used for human and animal antibiotics. The company is based in Shouguang, the People’s Republic of China.