Critical Analysis: U.S. Silica (SLCA) versus The Competition

U.S. Silica (NYSE: SLCA) is one of 21 publicly-traded companies in the “Mining & quarrying of nonmetallic minerals, except fuels” industry, but how does it contrast to its competitors? We will compare U.S. Silica to related businesses based on the strength of its dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Profitability

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This table compares U.S. Silica and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
U.S. Silica 11.70% 9.32% 5.60%
U.S. Silica Competitors 8.93% 9.40% 4.85%

Analyst Recommendations

This is a summary of recent ratings and target prices for U.S. Silica and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
U.S. Silica 1 3 16 0 2.75
U.S. Silica Competitors 193 706 869 28 2.41

U.S. Silica currently has a consensus target price of $41.90, suggesting a potential upside of 48.79%. As a group, “Mining & quarrying of nonmetallic minerals, except fuels” companies have a potential upside of 16.75%. Given U.S. Silica’s stronger consensus rating and higher probable upside, analysts clearly believe U.S. Silica is more favorable than its competitors.

Risk and Volatility

U.S. Silica has a beta of 2.3, indicating that its stock price is 130% more volatile than the S&P 500. Comparatively, U.S. Silica’s competitors have a beta of 0.66, indicating that their average stock price is 34% less volatile than the S&P 500.

Dividends

U.S. Silica pays an annual dividend of $0.25 per share and has a dividend yield of 0.9%. U.S. Silica pays out 16.7% of its earnings in the form of a dividend. As a group, “Mining & quarrying of nonmetallic minerals, except fuels” companies pay a dividend yield of 2.0% and pay out 46.8% of their earnings in the form of a dividend.

Institutional & Insider Ownership

99.3% of U.S. Silica shares are held by institutional investors. Comparatively, 59.0% of shares of all “Mining & quarrying of nonmetallic minerals, except fuels” companies are held by institutional investors. 1.4% of U.S. Silica shares are held by company insiders. Comparatively, 15.1% of shares of all “Mining & quarrying of nonmetallic minerals, except fuels” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares U.S. Silica and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
U.S. Silica $1.24 billion $145.20 million 18.77
U.S. Silica Competitors $1.87 billion $261.07 million 15.03

U.S. Silica’s competitors have higher revenue and earnings than U.S. Silica. U.S. Silica is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

U.S. Silica beats its competitors on 9 of the 15 factors compared.

About U.S. Silica

U.S. Silica Holdings, Inc. is a domestic producer of commercial silica, a specialized mineral that is an input into a range of end markets. The Company operates in two segments: Oil & Gas Proppants, and Industrial & Specialty Products. In the Oil & Gas Proppants segment, it serves the oil and gas recovery market providing fracturing sand, or frac sand, which is pumped down oil and natural gas wells to prop open rock fissures and manage the flow rate of natural gas and oil from the wells. As of December 31, 2016, the Industrial & Specialty Products segment consisted of over 215 products and materials, which are used in a range of industries, including container glass, fiberglass, specialty glass, flat glass, building products, fillers and extenders, foundry products, chemicals, recreation products and filtration products. It produces and sells a range of commercial silica products, including whole grain and ground products, as well as other industrial mineral products.

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