Avient (NYSE:AVNT) versus Tronox (NYSE:TROX) Head-To-Head Review

Tronox (NYSE:TROX) and Avient (NYSE:AVNT) are both basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, risk, dividends and valuation.

Volatility and Risk

Tronox has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Avient has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Tronox and Avient, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tronox	4	5	3	0	1.92
Avient	0	4	2	0	2.33

Tronox currently has a consensus price target of $6.60, indicating a potential downside of 16.92%. Avient has a consensus price target of $46.40, indicating a potential upside of 38.39%. Given Avient’s stronger consensus rating and higher possible upside, analysts plainly believe Avient is more favorable than Tronox.

Valuation and Earnings

This table compares Tronox and Avient”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tronox	$2.90 billion	0.44	-$470.00 million	($2.92)	-2.72
Avient	$3.28 billion	0.94	$81.90 million	$1.72	19.49

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

Insider & Institutional Ownership

73.4% of Tronox shares are held by institutional investors. Comparatively, 95.5% of Avient shares are held by institutional investors. 2.0% of Tronox shares are held by insiders. Comparatively, 0.9% of Avient shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Tronox pays an annual dividend of $0.20 per share and has a dividend yield of 2.5%. Avient pays an annual dividend of $1.10 per share and has a dividend yield of 3.3%. Tronox pays out -6.8% of its earnings in the form of a dividend. Avient pays out 64.0% 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. Avient has raised its dividend for 1 consecutive years. Avient is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Tronox and Avient’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tronox	-15.82%	-19.93%	-4.86%
Avient	4.81%	11.11%	4.40%

Summary

Avient beats Tronox on 14 of the 17 factors compared between the two stocks.

About Tronox

Tronox Holdings plc operates as a vertically integrated manufacturer of TiO2 pigment in North America, South and Central America, Europe, the Middle East, Africa, and the Asia Pacific. The company operates titanium-bearing mineral sand mines; and engages in beneficiation and smelting operations. It offers TiO2 pigment; ultrafine specialty TiO2; zircon; feedstock; pig iron; monazite; titanium tetrachloride; and other products. The company’s products are used for the manufacture of paints, coatings, plastics, and paper, as well as various other applications. Tronox Holdings plc is based in Stamford, Connecticut.

About Avient

Avient Corporation operates as a formulator of material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in two segments, Color, Additives and Inks; and Specialty Engineered Materials. The Color, Additives and Inks segment offers custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, and specialty inks; custom-formulated liquid system, such as polyester, vinyl, natural rubber and latex, polyurethane, and silicone; and proprietary inks. Its products are used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable, recreational and athletic apparel, construction and filtration, outdoor furniture, healthcare, textiles and appliances, and industrial markets. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials. It sells its products through direct sales personnel, distributors, and commissioned sales agents. The company was formerly known as PolyOne Corporation and changed its name to Avient Corporation in June 2020. Avient Corporation was founded in 1885 and is headquartered in Avon Lake, Ohio.