Axiall Corp (GGC) versus A. Schulman (NASDAQ:SHLM) Critical Review

A. Schulman (NASDAQ: SHLM) and Axiall Corp (NYSE:GGC) are both basic materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, profitability and earnings.

Earnings and Valuation

This table compares A. Schulman and Axiall Corp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
A. Schulman $2.42 billion 0.45 $207.01 million $0.87 42.41
Axiall Corp N/A N/A N/A N/A N/A

A. Schulman has higher revenue and earnings than Axiall Corp.

Institutional and Insider Ownership

84.2% of A. Schulman shares are held by institutional investors. 4.1% of A. Schulman shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares A. Schulman and Axiall Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
A. Schulman 1.35% 31.20% 3.06%
Axiall Corp -3.52% -7.36% -2.47%

Analyst Ratings

This is a summary of recent ratings and price targets for A. Schulman and Axiall Corp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
A. Schulman 0 3 1 0 2.25
Axiall Corp 0 0 0 0 N/A

A. Schulman presently has a consensus target price of $35.00, suggesting a potential downside of 5.15%. Given A. Schulman’s higher possible upside, research analysts plainly believe A. Schulman is more favorable than Axiall Corp.

Dividends

A. Schulman pays an annual dividend of $0.82 per share and has a dividend yield of 2.2%. Axiall Corp does not pay a dividend. A. Schulman pays out 94.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

A. Schulman beats Axiall Corp on 9 of the 10 factors compared between the two stocks.

About A. Schulman

A. Schulman, Inc. is an international supplier of plastic formulations, resins and services, and provides solutions to its customers’ requirements through custom-formulated products. The Company’s customers span a range of markets, such as packaging, mobility, building and construction, electronics and electrical, agriculture, personal care and hygiene, custom services, and sports, home and leisure. The Company’s segments include Europe, Middle East and Africa (EMEA), the United States and Canada (USCAN), Latin America (LATAM), Asia Pacific (APAC) and Engineered Composites (EC). As of August 31, 2016, the Company operated in six product families, including custom performance colors (CPC), engineered composites, Masterbatch solutions, engineered plastics, specialty powders and distribution services. The CPC product family offers powdered, pelletized and liquid color concentrates that are custom-designed for thermoplastic resins.

About Axiall Corp

Axiall Corporation (Axiall) is a manufacturer and international marketer of chemicals and building products. The Company operates through two segments: chlorovinyls and building products. Its products include chlorine, caustic soda, vinyl chloride monomer, siding and exterior accessories, and pipe and pipe fittings, among others. The Company’s chlorovinyls segment produces a chain of products, including chlor-alkali and derivative products, such as vinyl resins, ethylene dichloride (or 1, 2 dichloroethane) (EDC), chlorinated solvents, calcium hypochlorite, hydrochloric acid (HCL) and phosgene derivatives, and compound products, such as vinyl compounds and compound additives and plasticizers. The Company’s building products segment consists of over two primary product groups: window and door profiles and trim, moldings and deck products, and outdoor building products, which includes siding and exterior accessories, pipe and pipe fittings.

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