Critical Review: Ashland Global Holdings (ASH) versus Tronox (TROX)

Ashland Global Holdings (NYSE: ASH) and Tronox (NASDAQ:TROX) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Profitability

This table compares Ashland Global Holdings and Tronox’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ashland Global Holdings -4.71% 10.62% 3.70%
Tronox N/A N/A N/A

Earnings and Valuation

This table compares Ashland Global Holdings and Tronox’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ashland Global Holdings $5.06 billion 0.83 $719.00 million ($3.54) -19.09
Tronox $2.27 billion 1.37 $394.00 million N/A N/A

Ashland Global Holdings has higher revenue and earnings than Tronox.

Insider and Institutional Ownership

92.4% of Ashland Global Holdings shares are owned by institutional investors. 1.3% of Ashland Global Holdings shares are owned 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

Ashland Global Holdings pays an annual dividend of $0.90 per share and has a dividend yield of 1.3%. Tronox does not pay a dividend. Ashland Global Holdings pays out -25.4% of its earnings in the form of a dividend. Ashland Global Holdings has increased its dividend for 7 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Ashland Global Holdings and Tronox, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ashland Global Holdings 0 2 2 0 2.50
Tronox 0 0 3 0 3.00

Ashland Global Holdings currently has a consensus target price of $83.50, indicating a potential upside of 23.58%. Given Ashland Global Holdings’ higher probable upside, analysts clearly believe Ashland Global Holdings is more favorable than Tronox.

Summary

Ashland Global Holdings beats Tronox on 10 of the 15 factors compared between the two stocks.

About Ashland Global Holdings

Ashland Inc. is engaged in specialty chemicals, and through Valvoline, is a consumer-branded lubricant supplier. The Company operates in three segments: Ashland Specialty Ingredients (Specialty Ingredients), Ashland Performance Materials (Performance Materials) and Valvoline. Its Specialty Ingredients segment is engaged in providing cellulose ethers, vinyl pyrrolidones and biofunctionals, and consists of two divisions: Consumer Specialties and Industrial Specialties. Its Performance Materials segment is engaged in providing unsaturated polyester resins and vinyl ester resins, and consists of two divisions: Composites and Intermediates/Solvents. Its Valvoline segment is engaged in producing and distributing automotive, commercial and industrial lubricants, and automotive chemicals. Its chemistry is used in various markets and applications, including architectural coatings, adhesives, automotive, construction, energy and pharmaceutical.

About Tronox

Tronox Limited produces and markets titanium bearing mineral sands and titanium dioxide (TiO2) pigment in North America, Europe, South Africa, and the Asia-Pacific region. It primarily operates in two segments, TiO2 and Alkali. The TiO2 segment engages in the exploration, mining, and beneficiation of mineral sands deposits. This segment produces titanium feedstock, including chloride slag, ilmenite, leucoxene, titanium slag, slag fines, synthetic rutile, and leucoxene, as well as pig iron and zircon; and produces and markets TiO2 under the TRONOX brand name, which is used in the manufacture of paint and other coatings, and plastics and paper, as well as in various other applications comprising inks, fibers, rubber, food, cosmetics, and pharmaceuticals. It also manufactures and markets electrolytic manganese dioxide primarily for battery materials; and specialty boron products for semiconductors, pharmaceuticals, high-performance fibers, specialty ceramics, and epoxies, as well as igniter formulations. The Alkali segment produces natural soda ash for various industries comprising flat glass, container glass, detergent, and chemical manufacturing. This segment is involved in dry mining of trona ore underground at Westvaco facility; secondary recovery of trona from previously dry mined areas underground at Westvaco and Granger facilities; refining of raw trona ore into soda ash and specialty sodium alkali products; and marketing, sale, and distribution of alkali products. Tronox Limited was founded in 2005 and is based in Stamford, Connecticut.

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