Eastman Chemical (NYSE: EMN) and PolyOne (NYSE:POL) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.
Valuation & Earnings
This table compares Eastman Chemical and PolyOne’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Eastman Chemical||$9.55 billion||1.62||$1.38 billion||$7.61||14.21|
|PolyOne||$3.23 billion||1.11||-$57.70 million||$2.21||20.13|
Risk & Volatility
Eastman Chemical has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, PolyOne has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500.
This is a summary of current ratings and price targets for Eastman Chemical and PolyOne, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Eastman Chemical currently has a consensus target price of $102.86, suggesting a potential downside of 4.90%. PolyOne has a consensus target price of $45.00, suggesting a potential upside of 1.17%. Given PolyOne’s stronger consensus rating and higher probable upside, analysts clearly believe PolyOne is more favorable than Eastman Chemical.
This table compares Eastman Chemical and PolyOne’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Eastman Chemical pays an annual dividend of $2.24 per share and has a dividend yield of 2.1%. PolyOne pays an annual dividend of $0.70 per share and has a dividend yield of 1.6%. Eastman Chemical pays out 29.4% of its earnings in the form of a dividend. PolyOne pays out 31.7% 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. Eastman Chemical has increased its dividend for 6 consecutive years and PolyOne has increased its dividend for 6 consecutive years. Eastman Chemical is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
85.5% of Eastman Chemical shares are held by institutional investors. Comparatively, 93.9% of PolyOne shares are held by institutional investors. 1.2% of Eastman Chemical shares are held by insiders. Comparatively, 1.3% of PolyOne shares are held by 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.
Eastman Chemical beats PolyOne on 9 of the 16 factors compared between the two stocks.
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.
PolyOne Company Profile
PolyOne Corporation (PolyOne) provides specialized polymer materials, services and solutions. The Company’s segments include Color, Additives and Inks; Specialty Engineered Materials; Performance Products and Solutions, and PolyOne Distribution. The Color, Additives and Inks segment provides custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets. The Specialty Engineered Materials segment provides specialty polymer formulations, services and solutions for designers, assemblers and processors of thermoplastic materials. The Performance Products and Solutions segment consists of the Geon Performance Materials and Producer Services business units. As of December 31, 2016, the PolyOne Distribution segment distributed more than 4,000 grades of engineering and commodity grade resins.
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