LyondellBasell Industries NV (NYSE: LYB) and Methanex Corporation (NASDAQ:MEOH) are both mid-cap basic materials companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
LyondellBasell Industries NV 11.40% 60.87% 16.41%
Methanex Corporation 8.92% 12.43% 4.96%

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LyondellBasell Industries NV 1 5 8 0 2.50
Methanex Corporation 1 4 8 0 2.54

LyondellBasell Industries NV currently has a consensus price target of $95.92, suggesting a potential upside of 1.86%. Methanex Corporation has a consensus price target of $58.31, suggesting a potential upside of 10.33%. Given Methanex Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Methanex Corporation is more favorable than LyondellBasell Industries NV.

Dividends

LyondellBasell Industries NV pays an annual dividend of $3.60 per share and has a dividend yield of 3.8%. Methanex Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. LyondellBasell Industries NV pays out 40.2% of its earnings in the form of a dividend. Methanex Corporation pays out 47.8% 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. Methanex Corporation has increased its dividend for 5 consecutive years. LyondellBasell Industries NV is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

73.8% of LyondellBasell Industries NV shares are owned by institutional investors. Comparatively, 81.9% of Methanex Corporation shares are owned by institutional investors. 0.1% of LyondellBasell Industries NV shares are owned by insiders. Comparatively, 1.0% of Methanex Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

LyondellBasell Industries NV has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Methanex Corporation has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500.

Earnings and Valuation

This table compares LyondellBasell Industries NV and Methanex Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LyondellBasell Industries NV $31.95 billion 1.17 $6.14 billion $8.96 10.51
Methanex Corporation $2.58 billion 1.76 $572.88 million $2.51 21.06

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

About LyondellBasell Industries NV

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.

About Methanex Corporation

Methanex Corp is a Canada-based producer and supplier of methanol to a range of international markets. The Company operates production sites in Canada, Chile, Egypt, New Zealand, the United States, as well as Trinidad and Tobago. Its global operations are supported by a global supply chain of terminals, storage facilities and a fleet of methanol ocean tankers. The Company’s subsidiary, Waterfront Shipping Company Limited, operates its fleet, which is made up of over 20 vessels ranging from 3,000 to 50,000 deadweight tons of capacity. It has over three production facilities in New Zealand that supply methanol primarily to customers in Asia Pacific. The Company operates over two plants in Trinidad, Titan and Atlas, which supply methanol to markets in North America, Europe, Asia Pacific and South America. Its joint venture facility in Egypt supplies methanol to markets in Europe and Asia Pacific. Its plant in Medicine Hat, Alberta, supplies methanol to customers in North America.

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