Balchem (NASDAQ:BCPC – Get Free Report) and Standard Lithium (NYSE:SLI – Get Free Report) are both basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.
Earnings and Valuation
This table compares Balchem and Standard Lithium”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Balchem | $932.39 million | 6.12 | $108.54 million | $3.54 | 49.72 |
| Standard Lithium | N/A | N/A | -$31.35 million | ($0.23) | -7.00 |
Balchem has higher revenue and earnings than Standard Lithium. Standard Lithium is trading at a lower price-to-earnings ratio than Balchem, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Balchem | 0 | 0 | 1 | 0 | 3.00 |
| Standard Lithium | 0 | 0 | 1 | 0 | 3.00 |
Balchem presently has a consensus target price of $185.00, suggesting a potential upside of 5.11%. Standard Lithium has a consensus target price of $3.50, suggesting a potential upside of 117.39%. Given Standard Lithium’s higher probable upside, analysts clearly believe Standard Lithium is more favorable than Balchem.
Profitability
This table compares Balchem and Standard Lithium’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Balchem | 12.52% | 10.94% | 7.34% |
| Standard Lithium | N/A | -20.35% | -18.76% |
Risk & Volatility
Balchem has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Standard Lithium has a beta of 1.86, meaning that its share price is 86% more volatile than the S&P 500.
Insider and Institutional Ownership
87.9% of Balchem shares are held by institutional investors. Comparatively, 16.8% of Standard Lithium shares are held by institutional investors. 1.3% of Balchem shares are held by insiders. Comparatively, 3.7% of Standard Lithium shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Dividends
Balchem pays an annual dividend of $0.39 per share and has a dividend yield of 0.2%. Standard Lithium pays an annual dividend of $2.00 per share and has a dividend yield of 124.2%. Balchem pays out 11.0% 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. Balchem has raised its dividend for 15 consecutive years. Standard Lithium is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Balchem beats Standard Lithium on 9 of the 14 factors compared between the two stocks.
About Balchem
Balchem Corporation develops, manufactures, and markets specialty performance ingredients and products for the nutritional, food, pharmaceutical, animal health, medical device sterilization, plant nutrition, and industrial markets worldwide. It operates through three segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products. The Human Nutrition & Health segment supplies ingredients in the food and beverage industry. Its products include spray dried and emulsified powders, extrusion and agglomeration, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, and cereal systems, as well as ice cream bases and variegates. This segment also offers specialty vitamin K2; microencapsulation solutions for various applications; and human grade choline nutrients and mineral amino acid chelated products for nutrition and health applications. The Animal Nutrition & Health segment provides microencapsulated products to enhance health and milk production, and delivering nutrient supplements in ruminant animals; chelation technology, which offers enhanced nutrient absorption for various species of production and companion animals; methylsulfonylmethane; and choline chloride, a nutrient for monogastric animal health. The Specialty Products segment distributes ethylene oxide and ammonia primarily for use in the health care industry; and single use canisters for sterilizing re-usable devices. This segment also markets and sells propylene oxide, a fumigant to aid in the control of insects and microbiological spoilage, as well as to reduce bacterial and mold contamination in shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs, and prunes; and chelated minerals for high value crops. It sells its products through sales force, independent distributors, and sales agents. The company was incorporated in 1967 and is headquartered in Montvale, New Jersey.
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.
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