Huntsman (NYSE:HUN) & Standard Lithium (NYSE:SLI) Critical Review

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

Dividends

Huntsman pays an annual dividend of $1.00 per share and has a dividend yield of 4.3%. Standard Lithium pays an annual dividend of $2.00 per share and has a dividend yield of 105.5%. Huntsman pays out -192.3% of its earnings in the form of a dividend. Standard Lithium pays out -869.6% 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. Standard Lithium is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of current ratings and price targets for Huntsman and Standard Lithium, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Huntsman	1	4	4	0	2.33
Standard Lithium	0	0	1	0	3.00

Huntsman presently has a consensus target price of $25.56, suggesting a potential upside of 8.70%. Standard Lithium has a consensus target price of $3.50, suggesting a potential upside of 84.70%. Given Standard Lithium’s stronger consensus rating and higher possible upside, analysts plainly believe Standard Lithium is more favorable than Huntsman.

Insider and Institutional Ownership

84.8% of Huntsman shares are owned by institutional investors. Comparatively, 16.8% of Standard Lithium shares are owned by institutional investors. 5.6% of Huntsman shares are owned by insiders. Comparatively, 3.7% of Standard Lithium shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Huntsman has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Standard Lithium has a beta of 1.89, meaning that its stock price is 89% more volatile than the S&P 500.

Profitability

This table compares Huntsman and Standard Lithium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Huntsman	-1.44%	0.26%	0.12%
Standard Lithium	N/A	-15.67%	-14.05%

Valuation & Earnings

This table compares Huntsman and Standard Lithium”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Huntsman	$5.95 billion	0.68	$101.00 million	($0.52)	-45.21
Standard Lithium	N/A	N/A	$108.82 million	($0.23)	-8.24

Standard Lithium has lower revenue, but higher earnings than Huntsman. Huntsman is trading at a lower price-to-earnings ratio than Standard Lithium, indicating that it is currently the more affordable of the two stocks.

Summary

Standard Lithium beats Huntsman on 9 of the 15 factors compared between the two stocks.

About Huntsman

Huntsman Corporation manufactures and sells diversified organic chemical products worldwide. The company operates in three segments: Polyurethanes, Performance Products, and Advanced Materials. The Polyurethanes segment offers polyurethane chemicals, including methyl diphenyl diisocyanate, polyether and polyester polyols, and thermoplastic polyurethane; and aniline, benzene, nitrobenzene and other co-products. The Performance Products segment manufactures amines, such as polyetheramines, ethyleneamines, DGA Agent, JEFFCAT catalysts, and E-GRADE specialty amines and carbonates; and maleic anhydrides. The Advanced Materials segment offers epoxy, phenoxy, acrylic, polyurethane, and acrylonitrile-butadiene-based polymer formulations; and thermoset resins, curing and toughening agents, and carbon nanomaterials. The company provides pre-and post-sales technical service support to customers. Its products are used in a range of applications, including adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, insulation, packaging, coatings and construction, power generation, and refining, as well as serves the elastomers, insulation, footwear, furniture, industrial, oil and gas, liquid natural gas transport, printed circuit boards, consumer, appliances, electrical power transmission and distribution, recreational sports equipment, and medical appliances markets. The company sells its products through a network of distributors and agents. Huntsman Corporation was founded in 1970 and is headquartered in The Woodlands, Texas.

About Standard Lithium

Standard Lithium Ltd. explores for, develops, and processes lithium brine properties in the United States. Its flagship project is the Lanxess project with area of approximately 150,000 acres located in southern Arkansas. The company was formerly known as Patriot Petroleum Corp. and changed its name to Standard Lithium Ltd. in December 2016. Standard Lithium Ltd. was incorporated in 1998 and is headquartered in Vancouver, Canada.