Financial Analysis: Methanex (NASDAQ:MEOH) and Avient (NYSE:AVNT)

Avient (NYSE:AVNT) and Methanex (NASDAQ:MEOH) are both mid-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Avient	3.49%	10.75%	4.25%
Methanex	5.97%	9.07%	3.41%

Dividends

Avient pays an annual dividend of $1.10 per share and has a dividend yield of 3.5%. Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 1.8%. Avient pays out 89.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Methanex pays out 25.1% of its earnings in the form of a dividend. Avient has raised its dividend for 1 consecutive years and Methanex has raised its dividend for 4 consecutive years.

Risk and Volatility

Avient has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, Methanex has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500.

Insider & Institutional Ownership

95.5% of Avient shares are owned by institutional investors. Comparatively, 73.5% of Methanex shares are owned by institutional investors. 0.9% of Avient shares are owned by company insiders. Comparatively, 1.0% of Methanex shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Avient and Methanex”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avient	$3.24 billion	0.90	$169.50 million	$1.23	25.76
Methanex	$3.72 billion	0.85	$163.99 million	$2.95	13.81

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Avient and Methanex, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avient	0	5	4	1	2.60
Methanex	0	3	9	1	2.85

Avient currently has a consensus price target of $42.50, suggesting a potential upside of 34.11%. Methanex has a consensus price target of $46.55, suggesting a potential upside of 14.25%. Given Avient’s higher probable upside, research analysts plainly believe Avient is more favorable than Methanex.

Summary

Avient beats Methanex on 9 of the 17 factors compared between the two stocks.

About Avient

Avient Corporation operates as a formulator of material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in two segments, Color, Additives and Inks; and Specialty Engineered Materials. The Color, Additives and Inks segment offers custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, and specialty inks; custom-formulated liquid system, such as polyester, vinyl, natural rubber and latex, polyurethane, and silicone; and proprietary inks. Its products are used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable, recreational and athletic apparel, construction and filtration, outdoor furniture, healthcare, textiles and appliances, and industrial markets. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials. It sells its products through direct sales personnel, distributors, and commissioned sales agents. The company was formerly known as PolyOne Corporation and changed its name to Avient Corporation in June 2020. Avient Corporation was founded in 1885 and is headquartered in Avon Lake, Ohio.

About Methanex

Methanex Corporation produces and supplies methanol in China, Europe, the United States, South America, South Korea, Canada, and Asia. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.