Critical Contrast: Perimeter Solutions (NYSE:PRM) versus American Vanguard (NYSE:AVD)

American Vanguard (NYSE:AVD) and Perimeter Solutions (NYSE:PRM) are both materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for American Vanguard and Perimeter Solutions, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Vanguard	1	0	0	0	1.00
Perimeter Solutions	2	0	4	0	2.33

Perimeter Solutions has a consensus price target of $42.75, indicating a potential upside of 55.87%. Given Perimeter Solutions’ stronger consensus rating and higher possible upside, analysts plainly believe Perimeter Solutions is more favorable than American Vanguard.

Risk & Volatility

American Vanguard has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Perimeter Solutions has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500.

Institutional & Insider Ownership

79.0% of American Vanguard shares are owned by institutional investors. Comparatively, 89.9% of Perimeter Solutions shares are owned by institutional investors. 5.6% of American Vanguard shares are owned by insiders. Comparatively, 13.1% of Perimeter Solutions shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares American Vanguard and Perimeter Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Vanguard	-10.70%	-9.05%	-2.78%
Perimeter Solutions	-44.86%	19.15%	7.31%

Earnings and Valuation

This table compares American Vanguard and Perimeter Solutions”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Vanguard	$515.11 million	0.10	-$49.88 million	($1.90)	-0.92
Perimeter Solutions	$652.86 million	6.88	-$206.37 million	($2.23)	-12.30

American Vanguard has higher earnings, but lower revenue than Perimeter Solutions. Perimeter Solutions is trading at a lower price-to-earnings ratio than American Vanguard, indicating that it is currently the more affordable of the two stocks.

Summary

Perimeter Solutions beats American Vanguard on 10 of the 14 factors compared between the two stocks.

About American Vanguard

American Vanguard Corporation, through its subsidiaries, develops, manufactures, and markets specialty chemicals for agricultural, commercial, and consumer uses in the United States and internationally. It manufactures and formulates chemicals, including insecticides, fungicides, herbicides, soil health, plant nutrition, molluscicides, growth regulators, soil fumigants, and biorationals in liquid, powder, and granular forms for crops, turf and ornamental plants, and human and animal health protection. The company also markets, sells, and distributes end-use chemical and biological products for crop applications; and distributes chemicals for turf and ornamental markets. It distributes its products through national distribution companies, and buying groups or co-operatives; and through sales offices, sales force executives, sales agents, and wholly owned distributors. American Vanguard Corporation was incorporated in 1969 and is headquartered in Newport Beach, California.

About Perimeter Solutions

Perimeter Solutions, SA manufactures and supplies firefighting products and lubricant additives in the United States, Germany, and internationally. It operates in two segments, Fire Safety and Specialty Products. The Fire Safety segment provides fire retardants and firefighting foams, as well as specialized equipment and services for federal, state, provincial, local/municipal, and commercial customers. The Specialty Products segment produces and sells Phosphorus Pentasulfide, which is primarily used in the preparation of lubricant additives, including a family of compounds called Zinc Dialkyldithiophosphates. The company offers its products under the PHOS-CHEK, FIRE-TROL, AUXQUIMIA, and SOLBERG brands. Perimeter Solutions, SA was founded in 1963 and is headquartered in Clayton, Missouri.