Financial Analysis: DAQO New Energy (NYSE:DQ) vs. Givaudan (OTCMKTS:GVDNY)

Givaudan (OTCMKTS:GVDNY) and DAQO New Energy (NYSE:DQ) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and target prices for Givaudan and DAQO New Energy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Givaudan	1	1	0	1	2.33
DAQO New Energy	0	4	2	2	2.75

DAQO New Energy has a consensus target price of $21.01, suggesting a potential upside of 10.90%. Given DAQO New Energy’s stronger consensus rating and higher probable upside, analysts clearly believe DAQO New Energy is more favorable than Givaudan.

Profitability

This table compares Givaudan and DAQO New Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Givaudan	N/A	N/A	N/A
DAQO New Energy	-58.63%	-7.16%	-6.48%

Institutional and Insider Ownership

0.0% of Givaudan shares are owned by institutional investors. Comparatively, 47.2% of DAQO New Energy shares are owned by institutional investors. 24.3% of DAQO New Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Givaudan has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, DAQO New Energy has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Valuation and Earnings

This table compares Givaudan and DAQO New Energy”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Givaudan	$8.42 billion	5.34	$1.24 billion	N/A	N/A
DAQO New Energy	$1.03 billion	1.23	-$345.21 million	($6.51)	-2.91

Givaudan has higher revenue and earnings than DAQO New Energy.

Summary

Givaudan beats DAQO New Energy on 7 of the 13 factors compared between the two stocks.

About Givaudan

Givaudan SA manufactures, supplies, and sells fragrance, beauty, taste, and wellbeing products to the consumer goods industry. The company operates through divisions, Fragrance & Beauty, and Taste & Wellbeing. The Fragrance & Beauty division offers fine fragrances; consumer products, such as personal, home, fabric, and oral care; fragrance ingredients; and active beauty products. The Taste & Wellbeing division provides beverages, such as fizzy drinks, bottled waters, ready-to-drink juices, alcoholic beverages, and others; dairy and cheese products, including dairy drinks, yoghurt, ice cream, chilled desserts, cream cheese, and spreads; snacks; givaudan flavour ingredients; savory, and supplements and nutraceutical products; and biscuits, crackers, and cereals, as well as confectionery products, such as chewing gums, chocolates, and sweets. It operates in Switzerland, Europe, Africa, the Middle East, North America, Latin America, and the Asia Pacific. Givaudan SA was founded in 1796 and is headquartered in Vernier, Switzerland.

About DAQO New Energy

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp. in August 2009. Daqo New Energy Corp. was founded in 2006 and is based in Shanghai, the People's Republic of China.