Reviewing Arcadium Lithium (NYSE:ALTM) & Orica (OTCMKTS:OCLDF)

Orica (OTCMKTS:OCLDF) and Arcadium Lithium (NYSE:ALTM) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Insider & Institutional Ownership

37.5% of Orica shares are owned by institutional investors. Comparatively, 27.0% of Arcadium Lithium shares are owned by institutional investors. 0.4% of Arcadium Lithium shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Orica and Arcadium Lithium’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orica	N/A	N/A	N/A
Arcadium Lithium	N/A	N/A	N/A

Valuation and Earnings

This table compares Orica and Arcadium Lithium”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orica	N/A	N/A	N/A	$1.63	6.69
Arcadium Lithium	$1.21 billion	2.19	$1.12 billion	$1.04	2.37

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

Dividends

Orica pays an annual dividend of $0.16 per share and has a dividend yield of 1.5%. Arcadium Lithium pays an annual dividend of $6.00 per share and has a dividend yield of 243.9%. Orica pays out 9.8% of its earnings in the form of a dividend. Arcadium Lithium pays out 576.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of current ratings for Orica and Arcadium Lithium, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orica	0	0	0	0	N/A
Arcadium Lithium	0	1	1	0	2.50

Arcadium Lithium has a consensus price target of $11.00, suggesting a potential upside of 347.15%. Given Arcadium Lithium’s higher possible upside, analysts clearly believe Arcadium Lithium is more favorable than Orica.

Summary

Arcadium Lithium beats Orica on 5 of the 9 factors compared between the two stocks.

About Orica

Orica Limited manufactures, distributes, and sells commercial blasting systems, mining and tunnelling support systems, and various chemical products and services in Australia, Peru, the United States, and internationally. The company provides 4D bulk explosives systems, packaged explosives, initiating systems, boosters, and seismic explosive ranges; technical services and solutions; and supplementary services. It also offers automation solutions, including Avatel, a machine equipped with underground development charging system; and secondary breakage and hang up blasting, a tele-remote blasting solution. In addition, the company provides mining chemical products, such as cyanide sparges, emulsifiers, and sodium cyanide, as well as PRO services; digitally enabled benchmarks and insights at various stages of the blasting process; and nitrogen fertilizers, which includes urea ammonium nitrate and ammonia. Further, it offers resources to explore the use of chemical energy in blasting, blasting fundamentals, and properties of explosives and blasting principles; training courses; and geotechnical deformation and convergence monitoring solutions. Additionally, the company provides digital solutions, including MonitorIQ, an advanced processing and analytic software; BlastIQ, BlastVision, FRAGTrack, GroundProbe, RGR-Velox, LOADPlus, RHINO, DRILLMax, DRILLHub, WIREBmr, Axis mining technology, SHOTPlus, OREPro 3D Predict, Fortis Protect, Senatel, Exel Neo, Cyclo, and Bulkmaster. The company serves surface coal, surface metal, iron ore, quarrying, underground mining and construction, construction, civil infrastructure, oil and gas, and agriculture markets. Orica Limited was founded in 1874 and is headquartered in East Melbourne, Australia.

About Arcadium Lithium

Arcadium Lithium plc engages in the production of lithium chemicals products in the Asia Pacific, North America, Europe, the Middle East, Africa, and Latin America. It offers battery-grade lithium hydroxide, lithium carbonate, butyllithium and high purity lithium metal for electric vehicles, electronics, agricultural, industrial, greases, polymers, pharmaceutical, battery, and aerospace applications. The company also owns interest in various properties located in Argentina, Canada, and Western Australia. Arcadium Lithium plc was founded in 1944 and is based in Shannon, Ireland.