Reviewing Standard Lithium (NYSE:SLI) & Hawkins (NASDAQ:HWKN)

Hawkins (NASDAQ:HWKN) and Standard Lithium (NYSE:SLI) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Insider and Institutional Ownership

69.7% of Hawkins shares are held by institutional investors. Comparatively, 16.8% of Standard Lithium shares are held by institutional investors. 3.8% of Hawkins shares are held by insiders. Comparatively, 3.7% of Standard Lithium shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hawkins	8.75%	20.16%	12.53%
Standard Lithium	N/A	-15.67%	-14.05%

Volatility and Risk

Hawkins has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Standard Lithium has a beta of 1.89, meaning that its share price is 89% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Hawkins and Standard Lithium, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hawkins	0	1	0	0	2.00
Standard Lithium	0	0	1	0	3.00

Hawkins presently has a consensus price target of $122.00, indicating a potential downside of 8.94%. Standard Lithium has a consensus price target of $3.50, indicating a potential upside of 75.00%. Given Standard Lithium’s stronger consensus rating and higher probable upside, analysts plainly believe Standard Lithium is more favorable than Hawkins.

Dividends

Hawkins pays an annual dividend of $0.72 per share and has a dividend yield of 0.5%. Standard Lithium pays an annual dividend of $2.00 per share and has a dividend yield of 100.0%. Hawkins pays out 20.1% of its earnings in the form of a dividend. Standard Lithium pays out -869.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hawkins has raised its dividend for 20 consecutive years. Standard Lithium is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Hawkins 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
Hawkins	$923.92 million	3.04	$75.36 million	$3.59	37.32
Standard Lithium	N/A	N/A	$108.82 million	($0.23)	-8.70

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

Summary

Hawkins beats Standard Lithium on 9 of the 16 factors compared between the two stocks.

About Hawkins

Hawkins, Inc. operates as a specialty chemical and ingredients company in the United States. It operates through three segments: Industrial, Water Treatment, and Health and Nutrition. The Industrial segment offers industrial chemicals, products, and services to agriculture, chemical processing, electronics, energy, food, pharmaceutical, and plating industries. This segment manufactures sodium hypochlorite and agricultural products, as well as various food-grade and pharmaceutical products, such as liquid phosphates, lactates, other blended products, and agricultural products; and receives, stores, and distributes various chemicals comprising liquid caustic soda, sulfuric acid, hydrochloric acid, urea, phosphoric acid, aqua ammonia, and potassium hydroxide. It also repackages water treatment chemicals and bulk industrial chemicals; and performs custom blending of chemicals. The Water Treatment segment provides chemicals, products, equipment, services, and solutions for potable water, municipal and industrial wastewater, industrial process water, non-residential swimming pool water, and agriculture water. The Health and Nutrition segment offers ingredient distribution, processing, and formulation solutions to manufacturers of nutraceutical, functional food and beverage, personal care, dietary supplement and other nutritional food, and health and wellness products. Its products portfolio includes minerals, vitamins and amino acids, excipients, joint products, botanicals and herbs, sweeteners, and enzymes. Hawkins, Inc. was founded in 1938 and is headquartered in Roseville, Minnesota.

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.