Analyzing Toray Industries (OTCMKTS:TRYIY) and Orion (NYSE:OEC)

Toray Industries (OTCMKTS:TRYIY) and Orion (NYSE:OEC) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.

Risk and Volatility

Toray Industries has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500. Comparatively, Orion has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Institutional & Insider Ownership

94.3% of Orion shares are held by institutional investors. 3.1% of Orion shares are held by company 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.

Analyst Ratings

This is a summary of current recommendations for Toray Industries and Orion, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toray Industries	0	2	0	1	2.67
Orion	3	2	0	0	1.40

Orion has a consensus price target of $5.92, indicating a potential downside of 22.47%. Given Orion’s higher possible upside, analysts plainly believe Orion is more favorable than Toray Industries.

Profitability

This table compares Toray Industries and Orion’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toray Industries	1.71%	2.38%	1.29%
Orion	-4.98%	2.23%	0.47%

Earnings and Valuation

This table compares Toray Industries and Orion”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toray Industries	$16.83 billion	0.65	$514.21 million	$0.39	37.03
Orion	$1.81 billion	0.24	-$70.10 million	($1.60)	-4.77

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

Dividends

Toray Industries pays an annual dividend of $0.15 per share and has a dividend yield of 1.0%. Orion pays an annual dividend of $0.08 per share and has a dividend yield of 1.0%. Toray Industries pays out 38.5% of its earnings in the form of a dividend. Orion pays out -5.0% 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. Orion is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Toray Industries beats Orion on 10 of the 16 factors compared between the two stocks.

About Toray Industries

Toray Industries, Inc., together with its subsidiaries, manufactures, processes, and sells fibers and textiles, performance chemicals, carbon fiber composite materials, environment and engineering products, and life science products in Japan, China, North America, Europe, and internationally. The company offers filament yarns, staple fibers, and spun yarns, as well as woven and knitted fabrics of nylon, polyester, acrylics, and others; non-woven fabrics; ultra-fine fibers; and apparel products. It also provides nylon, ABS, PBT, PPS, and other resins and molded products; polyolefin foam products; polyester, polyethylene, polypropylene, and other films; processed film products; raw materials for synthetic fibers and other plastics; fine chemicals; electronic and information materials; and graphic materials. In addition, the company offers carbon fibers, carbon fiber composite materials, and molded products; analysis, physical evaluation, research, and other services; and pharmaceuticals, medical devices, etc. Further, it provides engineering services; condominiums; industrial equipment and machinery; IT-related equipment; water treatment membranes and related equipment; and materials for housing, building, and civil engineering applications. The company was formerly known as Toyo Rayon Co., Ltd. and changed its name to Toray Industries, Inc. in 1970. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.

About Orion

Orion S.A., together with its subsidiaries, engages in the manufacture and sale of carbon black products. It operates in two segments, Specialty Carbon Black and Rubber Carbon Black. The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for batteries, polymers, and coatings. It also provides rubber carbon black products for applications in mechanical rubber goods, as well as in tires under the ECORAX brand name; and acetylene-based conductive additives for lithium-ion batteries and other applications. It operates in the United States, Brazil, rest of the Americas, Germany, South Africa, Italy, Spain, Turkey, France, Rest of EMEA, China, the Republic of Korea, and rest of Asia. The company was formerly known as Orion Engineered Carbons S.A. and changed its name to Orion S.A. in June 2023. Orion S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.