Contrasting H. B. Fuller (NYSE:FUL) and Element Solutions (NYSE:ESI)

Element Solutions (NYSE:ESI) and H. B. Fuller (NYSE:FUL) are both mid-cap basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for Element Solutions and H. B. Fuller, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Element Solutions	0	2	6	3	3.09
H. B. Fuller	0	2	3	1	2.83

Element Solutions presently has a consensus price target of $44.29, indicating a potential upside of 11.81%. H. B. Fuller has a consensus price target of $67.86, indicating a potential upside of 21.21%. Given H. B. Fuller’s higher possible upside, analysts plainly believe H. B. Fuller is more favorable than Element Solutions.

Risk and Volatility

Element Solutions has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, H. B. Fuller has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Profitability

This table compares Element Solutions and H. B. Fuller’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Element Solutions	5.32%	14.19%	7.30%
H. B. Fuller	5.29%	12.18%	4.73%

Earnings & Valuation

This table compares Element Solutions and H. B. Fuller”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Element Solutions	$2.55 billion	3.78	$190.80 million	$0.62	63.88
H. B. Fuller	$3.47 billion	0.87	$151.97 million	$3.26	17.17

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

Insider & Institutional Ownership

92.3% of Element Solutions shares are held by institutional investors. Comparatively, 95.9% of H. B. Fuller shares are held by institutional investors. 6.2% of Element Solutions shares are held by company insiders. Comparatively, 1.8% of H. B. Fuller shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Element Solutions pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. H. B. Fuller pays an annual dividend of $0.98 per share and has a dividend yield of 1.8%. Element Solutions pays out 51.6% of its earnings in the form of a dividend. H. B. Fuller pays out 30.1% 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. H. B. Fuller has raised its dividend for 57 consecutive years. H. B. Fuller is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Element Solutions beats H. B. Fuller on 11 of the 18 factors compared between the two stocks.

About Element Solutions

Element Solutions Inc operates as a specialty chemicals company in the United States, China, and internationally. The company operates in two segments, Electronics, and Industrial & Specialty. The Electronics segment researches, formulates, and sells specialty chemicals and materials for various types of electronics hardware products. This segment also supplies surface mount technologies, fluxes, thermal management material, coatings, and other attachment materials; chemical formulations to the electronics industry; and advanced copper interconnects, die attachment, sintered silver material, adhesives, wafer bump processes, and photomask technologies for semiconductor industry. It primarily serves mobile communications, computers, automobiles, and aerospace equipment industries. The Industrial & Specialty segment provides industrial solutions, which include chemical systems that protect and decorate metal and plastic surfaces; consumable chemicals that enable printing image transfer on flexible packaging materials; and chemistries used in water-based hydraulic control fluids for offshore energy production applications. It serves aerospace, automotive, construction, consumer electronics, consumer packaged goods, and oil and gas production end markets. The company was formerly known as Platform Specialty Products Corporation and changed its name to Element Solutions Inc in January 2019. Element Solutions Inc was founded in 1785 and is headquartered in Fort Lauderdale, Florida.

About H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.