Critical Analysis: Asahi Kasei (OTCMKTS:AHKSY) and Standard Lithium (NYSE:SLI)

Asahi Kasei (OTCMKTS:AHKSY) and Standard Lithium (NYSE:SLI) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Asahi Kasei and Standard Lithium, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Asahi Kasei	0	0	0	0	0.00
Standard Lithium	0	0	1	0	3.00

Standard Lithium has a consensus price target of $3.50, suggesting a potential upside of 119.44%. Given Standard Lithium’s stronger consensus rating and higher probable upside, analysts plainly believe Standard Lithium is more favorable than Asahi Kasei.

Profitability

This table compares Asahi Kasei and Standard Lithium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Asahi Kasei	2.47%	7.65%	3.80%
Standard Lithium	N/A	-11.52%	-10.25%

Earnings and Valuation

This table compares Asahi Kasei and Standard Lithium”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Asahi Kasei	$19.29 billion	N/A	$302.26 million	$0.70	20.33
Standard Lithium	N/A	N/A	$108.82 million	$0.59	2.70

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

Risk and Volatility

Asahi Kasei has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, Standard Lithium has a beta of 1.79, suggesting that its stock price is 79% more volatile than the S&P 500.

Institutional and Insider Ownership

16.8% of Standard Lithium shares are held by institutional investors. 3.7% of Standard Lithium shares are held by 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.

Summary

Asahi Kasei beats Standard Lithium on 7 of the 13 factors compared between the two stocks.

About Asahi Kasei

Asahi Kasei Corporation manufactures and sells chemicals. It offers caustic soda, chemical fertilizers, nitric acid, ammonia, acrylonitrile, methyl methacrylate, styrene, adipic acid, hexamethylene diamine, AH salt, propionitrile, sodium cyanide, acetonitrile, methacrylonitrile, cyclohexyl methacrylate, polyethylenes, polyethylenes powder, PMMA resin, polystyrene, polybutadiene rubbers, styrene/butadiene rubbers, clear styrenic copolymer, styrenic thermoplastic elastomer, hydrogenated styrenic elastomers, membranes and systems, functional materials, foams, purging compound, polyisocyanates, polycarbonatediol, aluminum paste, latex, photopolymers and platemaking systems, films, cyclohexanol, cyclohexane, and cyclohexene. The company also offers lithium-ion battery and lead-acid battery separators, plastic optical fibers, artificial suede, nylon 66 filament, polyamide 66, polyacetal, polyphenyene ether, polypropylene compounds, 3D cubic knitted fabric, noise suppression sheets, audio devices, photosensitive polyimide/PBO precursor, latent hardeners, glass fabrics, specialty products, explosion-bonded metal clads, lining fabrics, cupro and stretch fibers, oil-water separators, cellulose nanobeads, and flame-resistant and synthetic fiber; magnetic, current, and gas sensors; deodorizing, spunbond, cupro, multifunctional, and heat-press formable thermoplastic nonwoven; and ecorise, biocradle, and bemliese products. It provides bags and containers; cooking products; cleaners; plastic packet cutting products; cyclohexyl methacrylate, bonded anchors, and microcrystalline cellulose; pharmaceuticals and diagnostic reagents, dialyzers, therapeutic apheresis, virus removal filters, defibrillators, AEDs, automated CPRs, fluid resuscitation pumps, wearable defibrillators, temperature management systems, and data solutions; construction materials; and remodeling services, as well as develops homes and apartments. The company was founded in 1922 and is headquartered in Tokyo, Japan.

About Standard Lithium

Standard Lithium Ltd. explores for, develops, and processes lithium brine properties in the United States. Its flagship project is the Lanxess project with area of approximately 150,000 acres located in southern Arkansas. The company was formerly known as Patriot Petroleum Corp. and changed its name to Standard Lithium Ltd. in December 2016. Standard Lithium Ltd. was incorporated in 1998 and is headquartered in Vancouver, Canada.