Huabao International (OTCMKTS:HUIHY) and Trinseo (NYSE:TSE) Critical Review

Trinseo (NYSE:TSE) and Huabao International (OTCMKTS:HUIHY) are both small-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.

Volatility & Risk

Trinseo has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, Huabao International has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500.

Earnings and Valuation

This table compares Trinseo and Huabao International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trinseo	$3.51 billion	0.01	-$348.50 million	($11.55)	-0.05
Huabao International	$469.25 million	N/A	-$53.62 million	N/A	N/A

Huabao International has lower revenue, but higher earnings than Trinseo.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Trinseo	-13.15%	N/A	-11.72%
Huabao International	N/A	N/A	N/A

Institutional & Insider Ownership

82.7% of Trinseo shares are held by institutional investors. 4.5% of Trinseo shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Trinseo and Huabao International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trinseo	1	2	0	0	1.67
Huabao International	0	0	0	0	0.00

Trinseo currently has a consensus price target of $1.00, suggesting a potential upside of 62.34%. Given Trinseo’s stronger consensus rating and higher probable upside, research analysts clearly believe Trinseo is more favorable than Huabao International.

Summary

Trinseo beats Huabao International on 6 of the 9 factors compared between the two stocks.

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.

About Huabao International

Huabao International Holdings Limited, an investment holding company, researches, develops, produces, distributes, and sells flavours and fragrances, food ingredients, tobacco and aroma raw materials, and condiment products primarily in the People's Republic of China. It offers paper-making reconstituted tobacco leaves and new materials products for the tobacco industry. The company is also involved in the production and sale of natural extracts; tobacco flavours and fragrances; filter materials; cigarette filters; synthetic perfumes; and food flavours and fragrances. Huabao International Holdings Limited was founded in 1996 and is headquartered in Wan Chai, Hong Kong.