Head to Head Analysis: VALE (VALE) & Trecora Resources (TREC)

VALE (NYSE: VALE) and Trecora Resources (NYSE:TREC) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitabiliy, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

9.0% of VALE shares are owned by institutional investors. Comparatively, 35.7% of Trecora Resources shares are owned by institutional investors. 6.6% of Trecora Resources shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for VALE and Trecora Resources, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VALE 0 6 9 0 2.60
Trecora Resources 0 0 3 0 3.00

VALE presently has a consensus price target of $9.26, indicating a potential upside of 14.30%. Trecora Resources has a consensus price target of $15.83, indicating a potential upside of 38.89%. Given Trecora Resources’ stronger consensus rating and higher possible upside, analysts clearly believe Trecora Resources is more favorable than VALE.

Dividends

VALE pays an annual dividend of $0.28 per share and has a dividend yield of 3.5%. Trecora Resources does not pay a dividend. VALE pays out 31.1% of its earnings in the form of a dividend.

Profitability

This table compares VALE and Trecora Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VALE 14.60% 16.32% 6.38%
Trecora Resources 6.24% 5.62% 3.21%

Risk & Volatility

VALE has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, Trecora Resources has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500.

Valuation and Earnings

This table compares VALE and Trecora Resources’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
VALE $30.36 billion 1.37 $13.79 billion $0.90 9.00
Trecora Resources $215.74 million 1.28 $26.72 million $0.54 21.11

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

Summary

VALE beats Trecora Resources on 10 of the 16 factors compared between the two stocks.

VALE Company Profile

Vale S.A. is a global producer of iron ore and iron ore pellets, key raw materials for steelmaking, and producer of nickel. The Company also produces copper, metallurgical and thermal coal, potash, phosphates and other fertilizer nutrients, manganese ore, ferroalloys, platinum group metals, gold, silver and cobalt. The Company’s segments include Ferrous minerals, which comprises the production and extraction of ferrous minerals, as iron ore fines, iron ore pellets and its logistic services, manganese and ferroalloys and others ferrous products and services; Coal, which comprises the extraction of metallurgical and thermal coal and its logistic services; Base metals, which includes the production and extraction of non-ferrous minerals, and are presented as nickel and its byproducts, and copper (copper concentrated), and Others, which comprises sales and expenses of other products, services and investments in joint ventures and associate in other business.

Trecora Resources Company Profile

Trecora Resources is engaged in manufacturing of specialty petrochemical products and synthetic waxes, and providing custom processing services. The Company operates through two segments: manufacturing of various specialty petrochemical products and manufacturing of specialty synthetic waxes. The specialty petrochemical products segment operates through South Hampton Resources, Inc. (SHR). The specialty synthetic wax segment operates through Trecora Chemical, Inc. (TC). SHR owns and operates a specialty petrochemical facility that produces hydrocarbons and other petroleum-based products, including isopentane, normal pentane, isohexane and hexane. TC produces specialty polyethylene and poly alpha olefin waxes, and provides custom processing services. TC provides custom manufacturing, distillation, blending, forming, and packaging of finished and intermediate products, and wax products for coatings, hot melt adhesives and lubricants.

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