Analyzing Sensient Technologies (NYSE:SXT) and Axalta Coating Systems (NYSE:AXTA)

Axalta Coating Systems (NYSE:AXTA) and Sensient Technologies (NYSE:SXT) are both mid-cap basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Profitability

This table compares Axalta Coating Systems and Sensient Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Axalta Coating Systems	8.58%	25.32%	7.05%
Sensient Technologies	8.56%	12.56%	6.60%

Volatility & Risk

Axalta Coating Systems has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500. Comparatively, Sensient Technologies has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Axalta Coating Systems and Sensient Technologies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Axalta Coating Systems	0	6	7	1	2.64
Sensient Technologies	0	1	1	0	2.50

Axalta Coating Systems currently has a consensus price target of $37.7143, indicating a potential upside of 23.15%. Sensient Technologies has a consensus price target of $110.00, indicating a potential downside of 4.74%. Given Axalta Coating Systems’ stronger consensus rating and higher possible upside, research analysts plainly believe Axalta Coating Systems is more favorable than Sensient Technologies.

Valuation & Earnings

This table compares Axalta Coating Systems and Sensient Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Axalta Coating Systems	$5.28 billion	1.26	$391.00 million	$2.04	15.01
Sensient Technologies	$1.56 billion	3.15	$124.67 million	$3.17	36.43

Axalta Coating Systems has higher revenue and earnings than Sensient Technologies. Axalta Coating Systems is trading at a lower price-to-earnings ratio than Sensient Technologies, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

98.3% of Axalta Coating Systems shares are held by institutional investors. Comparatively, 90.9% of Sensient Technologies shares are held by institutional investors. 0.3% of Axalta Coating Systems shares are held by company insiders. Comparatively, 1.2% of Sensient Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Axalta Coating Systems beats Sensient Technologies on 11 of the 15 factors compared between the two stocks.

About Axalta Coating Systems

Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high-performance coatings systems in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company operates through two segments, Performance Coatings and Mobility Coatings. It also offers water and solvent-borne products and systems to repair damaged vehicles for independent body shops, multi-shop operators, and original equipment manufacturer (OEM) dealership body shops. In addition, the company provides functional and decorative liquid, and powder coatings used in various industrial applications, including building materials, cabinet, wood and luxury vinyl flooring and furniture market under the Voltatex, AquaEC, Durapon, Hydropon, UNRIVALED, Ceranamel, Industrial, Corlar Industrial, Tufcote, Imron Industrial, Alesta, Teodur, Nap-Gard, Abcite, and Plascoat brands for powder coatings. Further, it develops and supplies electrocoat, primer, the basecoat, and clearcoat products for OEMs of light and commercial vehicles; and coatings systems for various commercial applications, including HDT, MDT, bus, and rail under the Imron, Imron Elite, Centari, Rival, Corlar epoxy undercoats, and AquaEC brands. The company offers products under the Audurra, Abcite, Alesta, AquaEC, Centari, Ceranamel, Challenger, Chemophan, ColorNet, Cromax, Cromax Mosaic, Durapon 70, Duxone, Harmonized Coating Technologies, Imron ExcelPro, Lutophen, Nason, Spies Hecker, Standox, Stollaquid, Syntopal, Syrox, Raptor, U-POL, and Vermeera brand names. The company was formerly known as Axalta Coating Systems Bermuda Co., Ltd. and changed its name to Axalta Coating Systems Ltd. in August 2014. Axalta Coating Systems Ltd. was founded in 1866 and is headquartered in Glen Mills, Pennsylvania.

About Sensient Technologies

Sensient Technologies Corporation, together with its subsidiaries, develops, manufactures, and markets colors, flavors, and other specialty ingredients in North America, Europe, Asia, Australia, South America, and Africa. The company offers flavor-delivery systems, and compounded and blended products; ingredient products, such as essential oils, natural and synthetic flavors, and natural extracts; and chili powder, paprika, and chili pepper, as well as dehydrated vegetables comprising parsley, celery, and spinach to the food, beverage, and personal care industries. It also provides natural and synthetic color systems for use in foods, beverages, pharmaceuticals, and nutraceuticals; colors and other ingredients for personal care, such as active ingredients, solubilizers, and surface treated pigments; pharmaceutical and nutraceutical excipients, including colors, flavors, coatings, and nutraceutical ingredients; and technical colors for industrial applications under the Sensient Food Colors, Sensient Pharmaceutical Coating Systems, Sensient Cosmetic Technologies, and Sensient Specialty Markets trade names. Sensient Technologies Corporation was incorporated in 1882 and is headquartered in Milwaukee, Wisconsin.