Albemarle (NYSE: ALB) and Celanese (NYSE:CE) are both large-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, profitability, institutional ownership and valuation.
This is a breakdown of recent recommendations for Albemarle and Celanese, as reported by MarketBeat.
||Strong Buy Ratings
Albemarle currently has a consensus target price of $125.18, indicating a potential upside of 12.05%. Celanese has a consensus target price of $113.21, indicating a potential upside of 10.15%. Given Albemarle’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Albemarle is more favorable than Celanese.
This table compares Albemarle and Celanese’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Insider & Institutional Ownership
87.4% of Albemarle shares are held by institutional investors. Comparatively, 95.8% of Celanese shares are held by institutional investors. 0.7% of Albemarle shares are held by insiders. Comparatively, 0.4% of Celanese shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Albemarle pays an annual dividend of $1.28 per share and has a dividend yield of 1.1%. Celanese pays an annual dividend of $1.84 per share and has a dividend yield of 1.8%. Albemarle pays out 45.7% of its earnings in the form of a dividend. Celanese pays out 29.7% 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. Albemarle has raised its dividend for 14 consecutive years and Celanese has raised its dividend for 6 consecutive years. Celanese is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Albemarle and Celanese’s revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
Celanese has higher revenue and earnings than Albemarle. Celanese is trading at a lower price-to-earnings ratio than Albemarle, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Albemarle has a beta of 1.56, suggesting that its share price is 56% more volatile than the S&P 500. Comparatively, Celanese has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.
Albemarle Corporation is a global developer, manufacturer and marketer of highly-engineered specialty chemicals. The Company operates through three segments: Lithium and Advanced Materials, Bromine Specialties and Refining Solutions. Lithium and Advanced Materials segment consist of two product categories: Lithium and Performance Catalyst Solutions. The bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. The Company serves various end markets, including petroleum refining, consumer electronics, energy storage, construction, automotive, lubricants, pharmaceuticals, crop protection, food safety and custom chemistry services. As of December 31, 2016, the Company and its joint ventures operated 31 production and research and development (R&D) facilities, as well as a number of administrative and sales offices, around the world.
Celanese Corporation (Celanese) is a technology and specialty materials company. The Company’s segments include Advanced Engineered Materials, Consumer Specialties, Industrial Specialties, Acetyl Intermediates and Other Activities. The Advanced Engineered Materials segment includes the Company’s engineered materials business and certain affiliates. The Consumer Specialties segment includes the Company’s cellulose derivatives and food ingredients businesses, which serve consumer-driven applications. The Industrial Specialties segment includes the Company’s emulsion polymers and ethylene vinyl acetate (EVA) polymers businesses. The Acetyl Intermediates segment includes the Company’s intermediate chemistry business, which produces and supplies acetyl products, including acetic acid, vinyl acetate monomer (VAM), acetic anhydride and acetate esters. The Company has operations in North America, Europe and Asia. As of December 31, 2016, the Company had 30 global production facilities.
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