Trinseo (NYSE: TSE) and Eastman Chemical (NYSE:EMN) are both basic materials companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.
Trinseo pays an annual dividend of $1.44 per share and has a dividend yield of 1.8%. Eastman Chemical pays an annual dividend of $2.24 per share and has a dividend yield of 2.1%. Trinseo pays out 17.7% of its earnings in the form of a dividend. Eastman Chemical pays out 29.4% 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. Eastman Chemical has increased its dividend for 6 consecutive years. Eastman Chemical is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Trinseo and Eastman Chemical’s gross revenue, earnings per share (EPS) and valuation.
||Earnings Per Share
Eastman Chemical has higher revenue and earnings than Trinseo. Trinseo is trading at a lower price-to-earnings ratio than Eastman Chemical, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
98.6% of Trinseo shares are owned by institutional investors. Comparatively, 85.5% of Eastman Chemical shares are owned by institutional investors. 0.3% of Trinseo shares are owned by company insiders. Comparatively, 1.2% of Eastman Chemical shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This is a breakdown of recent ratings and price targets for Trinseo and Eastman Chemical, as reported by MarketBeat.com.
||Strong Buy Ratings
Trinseo currently has a consensus target price of $90.00, indicating a potential upside of 15.09%. Eastman Chemical has a consensus target price of $102.86, indicating a potential downside of 4.79%. Given Trinseo’s stronger consensus rating and higher possible upside, equities analysts plainly believe Trinseo is more favorable than Eastman Chemical.
Risk and Volatility
Trinseo has a beta of 2.29, meaning that its stock price is 129% more volatile than the S&P 500. Comparatively, Eastman Chemical has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.
This table compares Trinseo and Eastman Chemical’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Eastman Chemical beats Trinseo on 9 of the 17 factors compared between the two stocks.
Trinseo Company Profile
Trinseo S.A. is a materials company engaged in the manufacture and marketing of synthetic rubber, latex and plastics. The Company’s segments include Latex Binders, Synthetic Rubber, Performance Plastics, Basic Plastics, Feedstocks and Americas Styrenics. The Latex Binders segment produces styrene-butadiene latex (SB latex) and other latex polymers and binders. The Synthetic Rubber segment produces synthetic rubber products used in tires, impact modifiers and technical rubber products. The Performance Plastics segment produces compounds and blends and specialized acrylonitrile-butadiene-styrene (ABS) grades. The Basic Plastics segment produces styrenic polymers, including polystyrene, basic ABS, and styrene-acrylonitrile (SAN) products, as well as polycarbonate (PC). The Feedstocks segment includes its production and procurement of styrene monomer outside of North America. The Americas Styrenics segment consists of the operations of its joint venture, Americas Styrenics LLC.
Eastman Chemical Company Profile
Eastman Chemical Company manufactures and sells materials, specialty additives, chemicals, and fibers in the United States and internationally. The company's Additives & Functional Products segment offers specialty coalescents, specialty and commodity solvents, paint additives, and specialty polymers; hydrocarbon and rosin resins; insoluble sulfur and antidegradant rubber additives; performance resins and amine derivative-based building blocks; heat transfer and aviation fluids; formic acid-based solutions; and metam-based soil fumigants, thiram and ziram based fungicides, and plant growth regulators. Its products are used in transportation, consumables, building and construction, industrial applications, animal nutrition, care chemicals, crop protection, and energy markets. Its Advanced Materials segment provides copolyesters, cellulose esters, polyvinyl butyral (PVB) sheets, specialty (PVB) intermediates, and window film and protective film, and aftermarket applied film products for value-added end uses in transportation, consumables, building and construction, durable goods, and health and wellness markets. The company's Chemical Intermediates segment offers Olefin derivatives, acetyl derivatives, ethylene, and commodity solvents; primary non-phthalate and phthala plasticizers, and a range of niche non- phthalate plasticizers; and methylamines and salts higher amines and solvents. Its Fibers segment manufactures and sells cellulose acetate tow for use in filtration media primarily cigarette filters; triacetin, cellulose acetate flake, and acetyl raw materials for other acetate fiber producers; and natural, acetate, and polyester yarn, as well as solution-dyed acetate yarn for use in apparel, home furnishings, and industrial fabrics. The company also offers aviation turbine engine oil; wet-laid nonwovens; and specialty films. Eastman Chemical Company was founded in 1920 and is headquartered in Kingsport, Tennessee.
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