Praxair (NYSE: PX) and LyondellBasell Industries NV (NYSE:LYB) are both large-cap basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, analyst recommendations, earnings, dividends and profitabiliy.

Analyst Ratings

This is a summary of current recommendations and price targets for Praxair and LyondellBasell Industries NV, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Praxair 2 10 3 0 2.07
LyondellBasell Industries NV 1 8 8 0 2.41

Praxair presently has a consensus target price of $131.00, suggesting a potential downside of 2.78%. LyondellBasell Industries NV has a consensus target price of $93.31, suggesting a potential upside of 7.42%. Given LyondellBasell Industries NV’s stronger consensus rating and higher probable upside, analysts plainly believe LyondellBasell Industries NV is more favorable than Praxair.

Risk & Volatility

Praxair has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, LyondellBasell Industries NV has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Profitability

This table compares Praxair and LyondellBasell Industries NV’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Praxair 14.26% 28.42% 8.16%
LyondellBasell Industries NV 11.67% 60.80% 16.14%

Institutional & Insider Ownership

85.6% of Praxair shares are owned by institutional investors. Comparatively, 73.3% of LyondellBasell Industries NV shares are owned by institutional investors. 0.2% of Praxair shares are owned by insiders. Comparatively, 0.1% of LyondellBasell Industries NV shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Praxair pays an annual dividend of $3.15 per share and has a dividend yield of 2.3%. LyondellBasell Industries NV pays an annual dividend of $3.60 per share and has a dividend yield of 4.1%. Praxair pays out 59.1% of its earnings in the form of a dividend. LyondellBasell Industries NV pays out 41.3% 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. Praxair has raised its dividend for 5 consecutive years and LyondellBasell Industries NV has raised its dividend for 12 consecutive years. LyondellBasell Industries NV is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Praxair and LyondellBasell Industries NV’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Praxair $10.75 billion 3.58 $3.50 billion $5.33 25.28
LyondellBasell Industries NV $30.87 billion 1.13 $5.95 billion $8.71 9.97

LyondellBasell Industries NV has higher revenue and earnings than Praxair. LyondellBasell Industries NV is trading at a lower price-to-earnings ratio than Praxair, indicating that it is currently the more affordable of the two stocks.

Summary

LyondellBasell Industries NV beats Praxair on 12 of the 17 factors compared between the two stocks.

Praxair Company Profile

Praxair, Inc. is an industrial gas company. The Company’s operations are organized into five segments, four of which have been determined on a geographic basis of segmentation: North America, Europe, South America and Asia. In addition, it operates its surface technologies business through its subsidiary, Praxair Surface Technologies, Inc., which represents the fifth segment. Its operations consist of two product lines: industrial gases and surface technologies. Its industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases). It also designs, engineers and builds equipment that produces industrial gases primarily for internal use. Its Surface Technologies segment, operated through Praxair Surface Technologies, Inc., supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders.

LyondellBasell Industries NV Company Profile

LyondellBasell Industries N.V. is a chemical company. The Company operates in five segments: Olefins and Polyolefins-Americas (O&P-Americas), Olefins and Polyolefins-Europe, Asia, International (O&P-EAI), Intermediates and Derivatives (I&D), Refining and Technology. The O&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene. The O&P-EAI segment produces and markets olefins and co-products, polyethylene and polypropylene. The I&D segment produces and markets propylene oxide (PO) and its derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer (SM), acetyls and ethylene oxides. The primary product of the Refining segment is refined products made from sulfur crude oil and other crude oils of various types and sources available on the United States Gulf Coast. The Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.

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