Analyzing Element Solutions (NYSE:ESI) and Mativ (NYSE:MATV)

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

Analyst Ratings

This is a summary of current recommendations and price targets for Element Solutions and Mativ, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Element Solutions	0	3	6	2	2.91
Mativ	1	1	1	0	2.00

Element Solutions currently has a consensus target price of $30.88, suggesting a potential upside of 9.84%. Mativ has a consensus target price of $10.00, suggesting a potential downside of 24.33%. Given Element Solutions’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Element Solutions is more favorable than Mativ.

Dividends

Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 1.1%. Mativ pays an annual dividend of $0.40 per share and has a dividend yield of 3.0%. Element Solutions pays out 32.3% of its earnings in the form of a dividend. Mativ pays out -5.0% 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 raised its dividend for 1 consecutive years. Mativ is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

92.3% of Element Solutions shares are owned by institutional investors. Comparatively, 95.0% of Mativ shares are owned by institutional investors. 6.9% of Element Solutions shares are owned by insiders. Comparatively, 2.0% of Mativ shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Element Solutions	$2.50 billion	2.72	$244.20 million	$0.99	28.39
Mativ	$1.98 billion	0.36	-$48.70 million	($8.03)	-1.65

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Element Solutions	9.58%	14.01%	7.28%
Mativ	-22.03%	7.06%	1.73%

Risk and Volatility

Element Solutions has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Mativ has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Summary

Element Solutions beats Mativ on 14 of the 18 factors compared between the two stocks.

About Element Solutions

Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies surface mount technologies, fluxes, thermal management material, coatings, and other attachment materials; chemical formulations to the electronics industry; and advanced copper interconnects, die attachment, sintered silver material, adhesives, wafer bump processes, and photomask technologies for semiconductor industry. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.

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.