Financial Analysis: Standard Lithium (NYSE:SLI) versus Gulf Resources (NASDAQ:GURE)

Standard Lithium (NYSE:SLI) and Gulf Resources (NASDAQ:GURE) are both small-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Volatility and Risk

Standard Lithium has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500. Comparatively, Gulf Resources has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.

Valuation & Earnings

This table compares Standard Lithium and Gulf Resources”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Standard Lithium	N/A	N/A	$108.82 million	$0.59	2.53
Gulf Resources	$30.04 million	0.24	-$61.79 million	($9.42)	-0.07

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

Insider & Institutional Ownership

16.8% of Standard Lithium shares are held by institutional investors. Comparatively, 3.3% of Gulf Resources shares are held by institutional investors. 3.7% of Standard Lithium shares are held by insiders. Comparatively, 1.7% of Gulf Resources 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Standard Lithium	N/A	-11.52%	-10.25%
Gulf Resources	-776.15%	-53.74%	-47.52%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Standard Lithium and Gulf Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Standard Lithium	0	0	2	0	3.00
Gulf Resources	0	0	0	0	0.00

Standard Lithium presently has a consensus target price of $3.95, indicating a potential upside of 165.10%. Given Standard Lithium’s stronger consensus rating and higher possible upside, analysts clearly believe Standard Lithium is more favorable than Gulf Resources.

Summary

Standard Lithium beats Gulf Resources on 12 of the 13 factors compared between the two stocks.

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.

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.