CSW Industrials (NASDAQ: CSWI) and Albemarle Corporation (NYSE:ALB) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Insider and Institutional Ownership

66.9% of CSW Industrials shares are owned by institutional investors. Comparatively, 86.2% of Albemarle Corporation shares are owned by institutional investors. 2.1% of CSW Industrials shares are owned by company insiders. Comparatively, 0.7% of Albemarle Corporation 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.

Profitability

This table compares CSW Industrials and Albemarle Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CSW Industrials 4.54% 10.53% 7.39%
Albemarle Corporation 31.49% 11.59% 5.42%

Volatility & Risk

CSW Industrials has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, Albemarle Corporation has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for CSW Industrials and Albemarle Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CSW Industrials 0 0 1 0 3.00
Albemarle Corporation 0 4 10 1 2.80

Albemarle Corporation has a consensus target price of $105.64, indicating a potential downside of 4.68%. Given Albemarle Corporation’s higher probable upside, analysts clearly believe Albemarle Corporation is more favorable than CSW Industrials.

Dividends

Albemarle Corporation pays an annual dividend of $1.28 per share and has a dividend yield of 1.2%. CSW Industrials does not pay a dividend. Albemarle Corporation pays out 16.4% of its earnings in the form of a dividend. CSW Industrials has raised its dividend for 13 consecutive years.

Earnings & Valuation

This table compares CSW Industrials and Albemarle Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CSW Industrials $341.00 million 1.88 $59.13 million $0.98 41.22
Albemarle Corporation $2.81 billion 4.36 $744.58 million $7.80 14.21

Albemarle Corporation has higher revenue and earnings than CSW Industrials. Albemarle Corporation is trading at a lower price-to-earnings ratio than CSW Industrials, indicating that it is currently the more affordable of the two stocks.

Summary

Albemarle Corporation beats CSW Industrials on 12 of the 18 factors compared between the two stocks.

About CSW Industrials

CSW Industrials, Inc. (CSWI) is a diversified industrial growth company. The Company operates through three segments: Industrial Products; Coatings, Sealants & Adhesives, and Specialty Chemicals. The Industrial Products segment consists of specialty mechanical products; fire and smoke protection products; architecturally specified building products, and storage, filtration and application equipment. The Coatings, Sealants & Adhesives segment comprises coatings and penetrants, pipe thread sealants, firestopping sealants, and caulks and adhesives/solvent cements. The Specialty Chemicals segment manufactures and supplies specialized consumables that impart or enhance properties, such as lubricity, anti-seize qualities, friction and heat control. Markets that it serves include HVAC, industrial, rail, plumbing, architecturally specified building products, energy, mining and other general industrial markets.

About Albemarle Corporation

Albemarle Corporation is a global developer, manufacturer and marketer of highly-engineered specialty chemicals. The Company operates through three segments: Lithium and Advanced Materials, Bromine Specialties and Refining Solutions. Lithium and Advanced Materials segment consist of two product categories: Lithium and Performance Catalyst Solutions. The bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. The Company serves various end markets, including petroleum refining, consumer electronics, energy storage, construction, automotive, lubricants, pharmaceuticals, crop protection, food safety and custom chemistry services. As of December 31, 2016, the Company and its joint ventures operated 31 production and research and development (R&D) facilities, as well as a number of administrative and sales offices, around the world.

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