Reviewing Eastman Chemical Company (NYSE:EMN) and Braskem (BAK)
Braskem (NYSE: BAK) and Eastman Chemical Company (NYSE:EMN) are both mid-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitabiliy, analyst recommendations and earnings.
Braskem pays an annual dividend of $0.77 per share and has a dividend yield of 3.4%. Eastman Chemical Company pays an annual dividend of $2.04 per share and has a dividend yield of 2.4%. Braskem pays out 30.2% of its earnings in the form of a dividend. Eastman Chemical Company pays out 33.8% 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. Braskem has raised its dividend for 5 consecutive years. Braskem is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings and target prices for Braskem and Eastman Chemical Company, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Eastman Chemical Company||0||5||6||0||2.55|
Braskem presently has a consensus price target of $20.00, suggesting a potential downside of 11.82%. Eastman Chemical Company has a consensus price target of $84.11, suggesting a potential downside of 1.51%. Given Eastman Chemical Company’s higher possible upside, analysts plainly believe Eastman Chemical Company is more favorable than Braskem.
Valuation & Earnings
This table compares Braskem and Eastman Chemical Company’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Braskem||$14.64 billion||N/A||$2.75 billion||$2.55||8.89|
|Eastman Chemical Company||$9.08 billion||1.37||$2.10 billion||$6.03||14.16|
Braskem has higher revenue and earnings than Eastman Chemical Company. Braskem is trading at a lower price-to-earnings ratio than Eastman Chemical Company, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
1.0% of Braskem shares are held by institutional investors. Comparatively, 87.9% of Eastman Chemical Company shares are held by institutional investors. 0.0% of Braskem shares are held by insiders. Comparatively, 1.1% of Eastman Chemical Company shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares Braskem and Eastman Chemical Company’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Eastman Chemical Company||9.84%||22.23%||6.53%|
Risk and Volatility
Braskem has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Eastman Chemical Company has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500.
Eastman Chemical Company beats Braskem on 10 of the 16 factors compared between the two stocks.
Braskem Company Profile
Braskem S.A. produces thermoplastic resins. The Company’s segments are Basic petrochemicals, Polyolefins, Vinyls, the United States and Europe, and Chemical distribution. It is also engaged in the import and export of chemicals, petrochemicals and fuels, the production, supply and sale of utilities such as steam, water, compressed air, industrial gases, the provision of industrial services, and the production, supply and sale of electric energy. It also invests in other companies, either as a partner or as shareholder. It operates over 40 industrial units, over 30 of which are located in the Brazilian states of Alagoas, Bahia, Rio de Janeiro, Rio Grande do Sul and Sao Paulo; over five are located in the United States, in the states of Pennsylvania, Texas and West Virginia, and over two are located in Germany, in the cities of Wesseling and Schkopau. These units produce thermoplastic resins–polyethylene, polypropylene and polyvinyl chloride, as well as basic petrochemicals.
Eastman Chemical Company Company Profile
Eastman Chemical Company (Eastman) is an advanced materials and specialty additives company. The Company’s segments include Additives & Functional Products (AFP), Advanced Materials (AM), Chemical Intermediates (CI), and Fibers. In the AFP segment, it manufactures chemicals for products in the coatings, tires, consumables, building and construction, industrial applications, including solar energy markets, animal nutrition, care chemicals, crop protection, and energy markets. In the AM segment, it produces and markets its polymers, films, and plastics with differentiated performance properties for end uses in transportation, consumables, building and construction, durable goods, and health and wellness products. The CI segment leverages large scale and vertical integration from the cellulose and acetyl, olefins, and alkylamines streams to support its specialty operating segments. Its product lines in Fibers segment include Acetate Tow, Acetate Yarn and Acetyl Chemical Products.
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