Ashland Global (NYSE:ASH) and Gulf Resources (NYSE:GURE) Critical Review
Gulf Resources (NASDAQ:GURE) and Ashland Global (NYSE:ASH) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.
Dividends
Ashland Global pays an annual dividend of $1.10 per share and has a dividend yield of 1.4%. Gulf Resources does not pay a dividend. Ashland Global pays out 30.7% of its earnings in the form of a dividend.
Profitability
This table compares Gulf Resources and Ashland Global’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Gulf Resources | N/A | -4.94% | -4.82% |
| Ashland Global | 2.30% | 5.79% | 2.41% |
Earnings and Valuation
This table compares Gulf Resources and Ashland Global’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gulf Resources | $2.60 million | 14.98 | -$69.96 million | N/A | N/A |
| Ashland Global | $3.74 billion | 1.29 | $114.00 million | $3.58 | 21.56 |
Ashland Global has higher revenue and earnings than Gulf Resources.
Insider and Institutional Ownership
6.8% of Gulf Resources shares are held by institutional investors. Comparatively, 94.1% of Ashland Global shares are held by institutional investors. 30.1% of Gulf Resources shares are held by insiders. Comparatively, 1.1% of Ashland Global shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Volatility and Risk
Gulf Resources has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Ashland Global has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and target prices for Gulf Resources and Ashland Global, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gulf Resources | 0 | 0 | 0 | 0 | N/A |
| Ashland Global | 0 | 2 | 5 | 0 | 2.71 |
Ashland Global has a consensus target price of $90.43, suggesting a potential upside of 17.17%. Given Ashland Global’s higher possible upside, analysts plainly believe Ashland Global is more favorable than Gulf Resources.
Summary
Ashland Global beats Gulf Resources on 10 of the 13 factors compared between the two stocks.
About Gulf Resources
Gulf Resources, Inc., through its subsidiaries, manufactures and trades in bromine, crude salt, chemical products, and natural gas in the People’s Republic of China. It provides bromine for use in brominated flame retardants, fumigants, water purification compounds, dyes, medicines, and disinfectants. The company also offers crude salt for use as a material in alkali and chlorine alkali production; and for use in the chemical, food and beverage, and other industries. In addition, it manufactures and sells chemical products for use in oil and gas field exploration, oil and gas distribution, oil field drilling, papermaking chemical agents, inorganic chemicals, and materials that are used for human and animal antibiotics. Gulf Resources, Inc. is based in Shouguang, the People’s Republic of China.
About Ashland Global
Ashland Global Holdings Inc. provides specialty chemical solutions worldwide. The company’s Specialty Ingredients segment offers products, technologies, and resources for solving formulation and product-performance challenges. It provides solutions using natural, synthetic, and semisynthetic polymers derived from cellulose ethers, vinyl pyrrolidones, acrylic polymers, polyester and polyurethane-based adhesives, and plant and seed extracts. This segment offers its solutions for the pharmaceutical companies; makers of personal care products, food, and beverages; makers of nutraceuticals and supplements; manufacturers of paint, coatings, and construction materials; packaging and converting markets; and oilfield service companies. Its Composites segment manufactures and sells a range of unsaturated polyester and vinyl ester resins, gelcoats, and low-profile additives for the reinforced plastics industry; and molten maleic anhydride for the manufacture of various products, such as unsaturated polyester resins, copolymers, lubricating oil additives, alkenyl succinic anhydrides, malic acid, fumaric acid, and derivative chemicals. This segment serves manufacturers of residential and commercial building products, industrial product specifiers and manufacturers, wind blade manufacturers, pipe manufacturers, automotive and truck original equipment manufacturers and suppliers, boat builders, and chemical producers. The company’s Intermediates and Solvents produces 1,4 butanediol and related derivatives, including tetrahydrofuran and n-methylpyrrolidone that are used as chemical intermediates in the production of engineering polymers and polyurethanes, as well as specialty process solvents used in electronics, pharmaceuticals, water filtration membranes, and others. The company was formerly known as Ashland Inc. and changed its name to Ashland Global Holdings Inc. in September 2016. Ashland Global Holdings Inc. was founded in 1924 and is headquartered in Covington, Kentucky.
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