Albemarle Corporation (NYSE: ALB) 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, analyst recommendations, earnings, profitability, valuation and dividends.

Institutional and Insider Ownership

83.7% of Albemarle Corporation shares are held by institutional investors. Comparatively, 81.9% of Methanex Corporation shares are held by institutional investors. 0.7% of Albemarle Corporation shares are held by insiders. Comparatively, 1.0% of Methanex Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Albemarle Corporation pays an annual dividend of $1.28 per share and has a dividend yield of 0.9%. Methanex Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 2.4%. Albemarle Corporation pays out 16.4% 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 13 consecutive years. Methanex Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Albemarle Corporation has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500. Comparatively, Methanex Corporation has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Albemarle Corporation 31.49% 11.59% 5.42%
Methanex Corporation 8.92% 12.43% 4.96%

Analyst Ratings

This is a breakdown of current ratings and target prices for Albemarle Corporation and Methanex Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Albemarle Corporation 0 6 11 0 2.65
Methanex Corporation 1 4 8 0 2.54

Albemarle Corporation currently has a consensus target price of $122.65, indicating a potential downside of 11.47%. Methanex Corporation has a consensus target price of $56.65, indicating a potential upside of 11.74%. Given Methanex Corporation’s higher probable upside, analysts clearly believe Methanex Corporation is more favorable than Albemarle Corporation.

Valuation & Earnings

This table compares Albemarle Corporation and Methanex Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Albemarle Corporation $2.81 billion 5.45 $744.58 million $7.80 17.76
Methanex Corporation $2.58 billion 1.69 $572.88 million $2.51 20.20

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

Summary

Albemarle Corporation beats Methanex Corporation on 10 of the 17 factors compared between the two stocks.

Albemarle Corporation Company Profile

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.

Methanex Corporation Company Profile

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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