Head-To-Head Analysis: Westaim (OTCMKTS:WEDXF) vs. AdvanSix (NYSE:ASIX)

AdvanSix (NYSE:ASIX) and Westaim (OTCMKTS:WEDXF) are both small-cap basic materials companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for AdvanSix and Westaim, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AdvanSix	0	2	1	0	2.33
Westaim	0	0	0	0	0.00

AdvanSix currently has a consensus target price of $25.67, indicating a potential upside of 1.19%. Given AdvanSix’s stronger consensus rating and higher probable upside, analysts clearly believe AdvanSix is more favorable than Westaim.

Dividends

AdvanSix pays an annual dividend of $0.64 per share and has a dividend yield of 2.5%. Westaim pays an annual dividend of $0.09 per share and has a dividend yield of 0.5%. AdvanSix pays out 35.4% of its earnings in the form of a dividend. Westaim pays out -7.1% 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. AdvanSix has increased its dividend for 2 consecutive years. AdvanSix is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

86.4% of AdvanSix shares are held by institutional investors. 5.6% of AdvanSix shares are held by company insiders. Comparatively, 4.2% of Westaim shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares AdvanSix and Westaim”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AdvanSix	$1.52 billion	0.45	$49.29 million	$1.81	14.01
Westaim	$53.37 million	10.48	-$38.00 million	($1.26)	-13.29

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

Volatility & Risk

AdvanSix has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500. Comparatively, Westaim has a beta of 0.21, meaning that its share price is 79% less volatile than the S&P 500.

Profitability

This table compares AdvanSix and Westaim’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AdvanSix	3.24%	6.97%	3.40%
Westaim	-77.37%	-6.15%	-5.25%

Summary

AdvanSix beats Westaim on 15 of the 17 factors compared between the two stocks.

About AdvanSix

AdvanSix Inc. engages in the manufacture and sale of polymer resins in the United States and internationally. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce fibers, filaments, engineered plastics, and films. The company also provides caprolactam to manufacture polymer resins; ammonium sulfate fertilizers to distributors, farm cooperatives, and retailers; and acetone that are used in the production of adhesives, paints, coatings, solvents, herbicides, and engineered plastic resins, as well as other intermediate chemicals, including phenol, monoisopropylamine, dipropylamine, monoallylamine, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, acetaldehyde oxime, 2-pentanone oxime, cyclohexanol, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. The company sells its products directly, as well as through distributors. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.

About Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.