Innospec (NASDAQ:IOSP – Get Free Report) and LyondellBasell Industries (NYSE:LYB – Get Free Report) are both basic materials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, earnings, risk, valuation and institutional ownership.
Dividends
Innospec pays an annual dividend of $1.68 per share and has a dividend yield of 2.0%. LyondellBasell Industries pays an annual dividend of $5.48 per share and has a dividend yield of 9.4%. Innospec pays out 155.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. LyondellBasell Industries pays out 169.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Innospec has raised its dividend for 11 consecutive years and LyondellBasell Industries has raised its dividend for 14 consecutive years. LyondellBasell Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Innospec and LyondellBasell Industries”s top-line revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Innospec | $1.85 billion | 1.12 | $35.60 million | $1.08 | 76.43 |
LyondellBasell Industries | $40.30 billion | 0.46 | $1.37 billion | $3.24 | 17.99 |
LyondellBasell Industries has higher revenue and earnings than Innospec. LyondellBasell Industries is trading at a lower price-to-earnings ratio than Innospec, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current ratings and recommmendations for Innospec and LyondellBasell Industries, as provided by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Innospec | 0 | 0 | 0 | 1 | 4.00 |
LyondellBasell Industries | 2 | 10 | 2 | 1 | 2.13 |
LyondellBasell Industries has a consensus target price of $69.75, suggesting a potential upside of 19.67%. Given LyondellBasell Industries’ higher probable upside, analysts plainly believe LyondellBasell Industries is more favorable than Innospec.
Institutional & Insider Ownership
96.6% of Innospec shares are owned by institutional investors. Comparatively, 71.2% of LyondellBasell Industries shares are owned by institutional investors. 1.3% of Innospec shares are owned by insiders. Comparatively, 0.1% of LyondellBasell Industries shares are owned 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.
Risk and Volatility
Innospec has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500. Comparatively, LyondellBasell Industries has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.
Profitability
This table compares Innospec and LyondellBasell Industries’ net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Innospec | 1.51% | 11.38% | 8.00% |
LyondellBasell Industries | 2.81% | 13.19% | 4.71% |
Summary
LyondellBasell Industries beats Innospec on 9 of the 17 factors compared between the two stocks.
About Innospec
Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals in the United States, rest of North America, the United Kingdom, rest of Europe, and internationally. The company's Fuel Specialties segment offers a range of specialty chemical products that are used as additives in additives in diesel, jet, marine, fuel oil and other fuels. This segment's products are used in the operation of commercial trucking, marine and aviation engines, power station generators, heating oil, and other industrial machinery applications. Its Performance Chemicals segment provides technology-based solutions for its customers' processes or products that focuses on the personal care, home care, agrochemical, construction, mining, and other industrial markets. The company's Oilfield Services segment develops and markets chemical solutions for drilling, completion, fracturing, stimulation, and completion operations; and products for oil and gas production. It sells its products primarily to oil and gas exploration and production companies, oil refineries, fuel manufacturers and users, personal care and home care companies, formulators of agrochemical, and other chemical and industrial companies. The company was formerly known as Octel Corp. and changed its name to Innospec Inc. in January 2006. Innospec Inc. was founded in 1938 and is headquartered in Englewood, Colorado.
About LyondellBasell Industries
LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.
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