Reviewing Braskem (BAK) and Its Rivals

Braskem (NYSE: BAK) is one of 33 public companies in the “Commodity Chemicals” industry, but how does it contrast to its peers? We will compare Braskem to related companies based on the strength of its analyst recommendations, profitability, earnings, dividends, institutional ownership, valuation and risk.

Institutional and Insider Ownership

0.6% of Braskem shares are held by institutional investors. Comparatively, 70.9% of shares of all “Commodity Chemicals” companies are held by institutional investors. 0.0% of Braskem shares are held by company insiders. Comparatively, 7.8% of shares of all “Commodity Chemicals” companies are held by company 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.

Risk & Volatility

Braskem has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, Braskem’s peers have a beta of 1.21, indicating that their average share price is 21% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Braskem and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Braskem 0 0 2 0 3.00
Braskem Competitors 106 836 1227 36 2.54

Braskem currently has a consensus price target of $22.00, suggesting a potential downside of 21.18%. As a group, “Commodity Chemicals” companies have a potential upside of 2.03%. Given Braskem’s peers higher probable upside, analysts clearly believe Braskem has less favorable growth aspects than its peers.

Profitability

This table compares Braskem and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Braskem 3.07% 28.41% 2.59%
Braskem Competitors -29.50% 24.34% 5.63%

Valuation & Earnings

This table compares Braskem and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Braskem $13.74 billion -$117.96 million 31.01
Braskem Competitors $4.01 billion $340.26 million 132.07

Braskem has higher revenue, but lower earnings than its peers. Braskem is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Braskem peers beat Braskem on 8 of the 13 factors compared.

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.

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