Financial Review: Celanese (CE) versus W. R. Grace and (GRA)

Celanese (NYSE: CE) and W. R. Grace and (NYSE:GRA) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.

Valuation & Earnings

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This table compares Celanese and W. R. Grace and’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Celanese $6.14 billion 2.21 $843.00 million $7.51 13.30
W. R. Grace and $1.72 billion 2.43 $11.20 million $3.40 18.14

Celanese has higher revenue and earnings than W. R. Grace and. Celanese is trading at a lower price-to-earnings ratio than W. R. Grace and, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Celanese has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, W. R. Grace and has a beta of 1.21, indicating that its share price is 21% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Celanese and W. R. Grace and, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Celanese 1 5 11 0 2.59
W. R. Grace and 0 3 8 0 2.73

Celanese presently has a consensus target price of $115.79, suggesting a potential upside of 15.88%. W. R. Grace and has a consensus target price of $80.80, suggesting a potential upside of 31.00%. Given W. R. Grace and’s stronger consensus rating and higher possible upside, analysts clearly believe W. R. Grace and is more favorable than Celanese.

Profitability

This table compares Celanese and W. R. Grace and’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Celanese 13.73% 32.96% 11.61%
W. R. Grace and 0.65% 63.39% 7.87%

Institutional & Insider Ownership

95.8% of Celanese shares are owned by institutional investors. Comparatively, 86.4% of W. R. Grace and shares are owned by institutional investors. 0.4% of Celanese shares are owned by insiders. Comparatively, 1.3% of W. R. Grace and shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Celanese pays an annual dividend of $1.84 per share and has a dividend yield of 1.8%. W. R. Grace and pays an annual dividend of $0.96 per share and has a dividend yield of 1.6%. Celanese pays out 24.5% of its earnings in the form of a dividend. W. R. Grace and pays out 28.2% 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. Celanese has raised its dividend for 6 consecutive years. Celanese is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Celanese beats W. R. Grace and on 11 of the 17 factors compared between the two stocks.

Celanese Company Profile

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.

W. R. Grace and Company Profile

W. R. Grace & Co. produces and sells specialty chemicals and materials worldwide. It operates through two segments, Grace Catalysts Technologies and Grace Materials Technologies. The Grace Catalysts Technologies segment offers fluid catalytic cracking (FCC) catalysts for the production of transportation fuels, such as gasoline and diesel fuels, and other petroleum-based products; FCC additives; and methanol-to-olefins catalysts for the conversion of methanol into petrochemical feeds, including ethylene and propylene. This segment also provides hydro processing catalysts used in process reactors to upgrade heavy oils into lighter products; polyolefin catalysts and catalyst supports for the production of polypropylene and polyethylene thermoplastic resins; and chemical catalysts used in various industrial, environmental, and consumer applications, as well as gas-phase polypropylene process technology to manufacture polypropylene products. The Grace Materials Technologies segment offers silica-based and silica-alumina-based materials for use in coatings, consumer, industrial, and pharmaceutical applications. W. R. Grace & Co. was founded in 1854 and is headquartered in Columbia, Maryland.

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