Reviewing Rayonier Advanced Materials (NYSE:RYAM) and Chemtura (CHMT)

Rayonier Advanced Materials (NYSE: RYAM) and Chemtura (NYSE:CHMT) are both basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Dividends

Rayonier Advanced Materials pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. Chemtura does not pay a dividend. Rayonier Advanced Materials pays out 43.8% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Rayonier Advanced Materials and Chemtura’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rayonier Advanced Materials $869.00 million 0.92 $73.28 million $0.64 28.98
Chemtura N/A N/A N/A ($0.19) -176.32

Rayonier Advanced Materials has higher revenue and earnings than Chemtura. Chemtura is trading at a lower price-to-earnings ratio than Rayonier Advanced Materials, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

95.2% of Rayonier Advanced Materials shares are held by institutional investors. Comparatively, 93.1% of Chemtura shares are held by institutional investors. 2.1% of Rayonier Advanced Materials shares are held by insiders. Comparatively, 2.6% of Chemtura 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 Rayonier Advanced Materials and Chemtura’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rayonier Advanced Materials 4.98% 18.12% 2.79%
Chemtura 5.71% 9.00% 4.02%

Analyst Recommendations

This is a summary of recent ratings and target prices for Rayonier Advanced Materials and Chemtura, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rayonier Advanced Materials 0 0 5 0 3.00
Chemtura 0 0 0 0 N/A

Rayonier Advanced Materials presently has a consensus target price of $19.20, suggesting a potential upside of 3.50%. Given Rayonier Advanced Materials’ higher possible upside, analysts clearly believe Rayonier Advanced Materials is more favorable than Chemtura.

Summary

Rayonier Advanced Materials beats Chemtura on 7 of the 11 factors compared between the two stocks.

Rayonier Advanced Materials Company Profile

Rayonier Advanced Materials Inc. is engaged in the production of cellulose specialties. The Company’s product lines include cellulose specialties and commodity products. Its products are used in manufacturing processes. The Company’s products are sold throughout the world to companies for use in various industrial applications, and to produce a range of products, including cigarette filters, foods, pharmaceuticals, textiles and electronics. The Company focuses on producing various forms of cellulose specialties products, such as cellulose acetate and cellulose ethers. The Company’s production facilities are located in Jesup, Georgia and Fernandina Beach, Florida. The Jesup plant can produce cellulose specialties or commodity products using both hardwood and softwood in a pre-hydrolyzed kraft or high potential of hydrogen (pH) cooking process. The Fernandina Beach plant can produce cellulose specialties or commodity products using softwood in a sulfite or low pH cooking process.

Chemtura Company Profile

Chemtura Corporation is a chemical company. The Company is engaged in developing, manufacturing and marketing of engineered industrial specialty chemicals. The Company’s products are sold to industrial manufacturing customers for use as additives, ingredients or intermediates. The Company’s segments are Industrial Performance Products and Industrial Engineered Products. The Industrial Performance Products segment manufactures and markets lubricant additive components, synthetic lubricant base-stocks, synthetic finished fluids, calcium sulfonate specialty greases and phosphate and polyester based fluids, and is also engaged in the development and production of hot cast elastomer pre-polymers. The Industrial Engineered Products segment develops and manufactures bromine and bromine-based products and organometallic compounds. The Company operates in a range of industries, including automotive, building and construction, electronics, lubricants, packaging and transportation.

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