Head to Head Review: Celanese (CE) & Albemarle (ALB)

Albemarle (NYSE: ALB) and Celanese (NYSE:CE) are both large-cap basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

88.1% of Albemarle shares are owned by institutional investors. Comparatively, 96.1% of Celanese shares are owned by institutional investors. 0.7% of Albemarle shares are owned by company insiders. Comparatively, 0.4% of Celanese shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Albemarle and Celanese, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Albemarle 0 6 13 0 2.68
Celanese 1 5 10 1 2.65

Albemarle presently has a consensus target price of $125.58, suggesting a potential downside of 1.08%. Celanese has a consensus target price of $108.00, suggesting a potential downside of 2.49%. Given Albemarle’s stronger consensus rating and higher possible upside, equities analysts clearly believe Albemarle is more favorable than Celanese.

Volatility and Risk

Albemarle has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500. Comparatively, Celanese has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Dividends

Albemarle pays an annual dividend of $1.28 per share and has a dividend yield of 1.0%. Celanese pays an annual dividend of $1.84 per share and has a dividend yield of 1.7%. Albemarle pays out 16.6% of its earnings in the form of a dividend. Celanese pays out 32.1% 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. Albemarle has raised its dividend for 14 consecutive years and Celanese has raised its dividend for 6 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Albemarle 30.07% 11.61% 5.99%
Celanese 13.66% 31.98% 11.39%

Earnings & Valuation

This table compares Albemarle and Celanese’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Albemarle $2.68 billion 5.24 $643.67 million $7.73 16.42
Celanese $5.39 billion 2.79 $900.00 million $5.73 19.33

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

Summary

Albemarle beats Celanese on 11 of the 18 factors compared between the two stocks.

About Albemarle

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.

About Celanese

Celanese Corporation (Celanese) is a technology and specialty materials company. The Company’s segments include Advanced Engineered Materials, Consumer Specialties, Industrial Specialties, Acetyl Intermediates and Other Activities. The Advanced Engineered Materials segment includes the Company’s engineered materials business and certain affiliates. The Consumer Specialties segment includes the Company’s cellulose derivatives and food ingredients businesses, which serve consumer-driven applications. The Industrial Specialties segment includes the Company’s emulsion polymers and ethylene vinyl acetate (EVA) polymers businesses. The Acetyl Intermediates segment includes the Company’s intermediate chemistry business, which produces and supplies acetyl products, including acetic acid, vinyl acetate monomer (VAM), acetic anhydride and acetate esters. The Company has operations in North America, Europe and Asia. As of December 31, 2016, the Company had 30 global production facilities.

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