Dow Chemical (DWDP) vs. AdvanSix (ASIX) Critical Contrast

Dow Chemical (NYSE: DWDP) and AdvanSix (NYSE:ASIX) are both basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Insider and Institutional Ownership

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70.5% of Dow Chemical shares are owned by institutional investors. Comparatively, 78.0% of AdvanSix shares are owned by institutional investors. 0.4% of Dow Chemical shares are owned by company insiders. Comparatively, 2.7% of AdvanSix shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Dow Chemical and AdvanSix, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dow Chemical 0 4 21 0 2.84
AdvanSix 0 0 1 0 3.00

Dow Chemical presently has a consensus target price of $81.00, suggesting a potential upside of 19.91%. AdvanSix has a consensus target price of $41.00, suggesting a potential upside of 9.86%. Given Dow Chemical’s higher probable upside, equities analysts clearly believe Dow Chemical is more favorable than AdvanSix.

Risk and Volatility

Dow Chemical has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, AdvanSix has a beta of 1.45, indicating that its share price is 45% more volatile than the S&P 500.

Dividends

Dow Chemical pays an annual dividend of $1.52 per share and has a dividend yield of 2.3%. AdvanSix does not pay a dividend. Dow Chemical pays out 44.7% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Dow Chemical and AdvanSix’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dow Chemical $62.48 billion 2.52 $1.46 billion $3.40 19.87
AdvanSix $1.48 billion 0.77 $146.69 million $3.00 12.44

Dow Chemical has higher revenue and earnings than AdvanSix. AdvanSix is trading at a lower price-to-earnings ratio than Dow Chemical, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Dow Chemical and AdvanSix’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dow Chemical 2.34% 8.21% 3.92%
AdvanSix 9.94% 32.17% 9.95%

Dow Chemical Company Profile

DowDuPont Inc., through its subsidiaries, engages in agriculture, materials science, and specialty products businesses worldwide. The company's Agriculture segment develops and sells hybrid corn seed and soybean seed varieties; canola, cotton, sunflower, sorghum, wheat, and rice seeds; silage inoculants; and weed control, disease control, and insect control products. Its Performance Materials & Coatings segment manufactures and sells architectural paints and coatings, and industrial coatings; performance monomers and silicones; and standalone silicone and acrylic-based materials. The company's Industrial Intermediates & Infrastructure segment offers cellulose ethers, redispersible latex powders, silicones, and acrylic emulsions; energy solutions; propylene oxide and propylene glycol, polyether polyols and aromatic isocyanates, and formulated polyurethane systems; and caustic soda, and ethylene dichloride and vinyl chloride monomer products. Its Packaging & Specialty Plastics segment provides ethylene, and propylene and aromatic products; and polyolefin elastomers and ethylene propylene diene monomer elastomers. The company's Electronics & Imaging segment offers materials and systems for mobile devices, television monitors, personal computers, and electronics. Its Nutrition & Biosciences segment provides specialty food ingredients, as well as cellulosic- and alginates-based pharma excipients; and enzymes, biomaterials, biocides, and antimicrobial solutions and process technology. The company's Transportation & Advanced Polymers segment offers engineering resins, adhesives, lubricants, and parts for transportation, electronics, medical, industrial, and consumer end-markets. Its Safety & Construction segment provides engineered products and integrated systems for construction, worker safety, energy, oil and gas, transportation, medical device, and water purification and separation industries. The company was founded in 1897 and is headquartered in Midland, Michigan.

AdvanSix Company Profile

AdvanSix Inc. manufactures and sells polymer resins in the United States. It offers Nylon 6, a polymer resin, which is a synthetic material used to produce engineered plastics, fibers, filaments, and films. The company also provides caprolactam, ammonium sulfate fertilizers, and acetone, as well as other intermediate chemicals, including phenol, alpha-methylstyrene, cyclohexanone, methyl ethyl ketoxime, cyclohexanol, acetaldehyde oxime, 2-pentanone oxime, sulfuric acid, ammonia, and carbon dioxide. It offers its products under the Aegis, Capran, Sulf-N, Nadone, Naxol, and EZ-Blox brands. AdvanSix Inc. was incorporated in 2016 and is headquartered in Parsippany, New Jersey.

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