Reviewing Axiall (AXLL) and Praxair (PX)

Axiall (NYSE: AXLL) and Praxair (NYSE:PX) are both basic materials companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Analyst Ratings

This is a summary of recent ratings and target prices for Axiall and Praxair, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Axiall 0 0 0 0 N/A
Praxair 1 5 9 0 2.53

Praxair has a consensus price target of $161.08, indicating a potential downside of 2.78%.

Institutional and Insider Ownership

85.6% of Praxair shares are held by institutional investors. 0.2% of Praxair shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Axiall pays an annual dividend of $0.64 per share. Praxair pays an annual dividend of $3.15 per share and has a dividend yield of 1.9%. Axiall pays out -5.0% of its earnings in the form of a dividend. Praxair pays out 72.9% 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. Praxair has increased its dividend for 13 consecutive years. Praxair is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Axiall and Praxair’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Axiall -3.52% -7.36% -2.47%
Praxair 10.90% 26.54% 8.40%

Earnings & Valuation

This table compares Axiall and Praxair’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Axiall N/A N/A N/A ($12.69) N/A
Praxair $11.44 billion 4.15 $1.25 billion $4.32 38.35

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

Summary

Praxair beats Axiall on 11 of the 12 factors compared between the two stocks.

About Axiall

Axiall Corporation (Axiall) is a manufacturer and international marketer of chemicals and building products. The Company operates through two segments: chlorovinyls and building products. Its products include chlorine, caustic soda, vinyl chloride monomer, siding and exterior accessories, and pipe and pipe fittings, among others. The Company’s chlorovinyls segment produces a chain of products, including chlor-alkali and derivative products, such as vinyl resins, ethylene dichloride (or 1, 2 dichloroethane) (EDC), chlorinated solvents, calcium hypochlorite, hydrochloric acid (HCL) and phosgene derivatives, and compound products, such as vinyl compounds and compound additives and plasticizers. The Company’s building products segment consists of over two primary product groups: window and door profiles and trim, moldings and deck products, and outdoor building products, which includes siding and exterior accessories, pipe and pipe fittings.

About Praxair

Praxair, Inc. is an industrial gas company. The Company’s operations are organized into five segments, four of which have been determined on a geographic basis of segmentation: North America, Europe, South America and Asia. In addition, it operates its surface technologies business through its subsidiary, Praxair Surface Technologies, Inc., which represents the fifth segment. Its operations consist of two product lines: industrial gases and surface technologies. Its industrial gases product line centers on the manufacturing and distribution of atmospheric gases (oxygen, nitrogen, argon, rare gases) and process gases (carbon dioxide, helium, hydrogen, electronic gases, specialty gases). It also designs, engineers and builds equipment that produces industrial gases primarily for internal use. Its Surface Technologies segment, operated through Praxair Surface Technologies, Inc., supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders.

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