Contrasting Shin-Etsu Chemical (OTCMKTS:SHECY) & Jerónimo Martins, SGPS (OTCMKTS:JRONY)

Shin-Etsu Chemical (OTCMKTS:SHECYGet Rating) and Jerónimo Martins, SGPS (OTCMKTS:JRONYGet Rating) are both large-cap basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Dividends

Shin-Etsu Chemical pays an annual dividend of $0.47 per share and has a dividend yield of 1.4%. Jerónimo Martins, SGPS pays an annual dividend of $0.47 per share and has a dividend yield of 1.2%. Shin-Etsu Chemical pays out 17.6% of its earnings in the form of a dividend. Jerónimo Martins, SGPS pays out 31.3% 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. Shin-Etsu Chemical is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Shin-Etsu Chemical and Jerónimo Martins, SGPS’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shin-Etsu Chemical $18.48 billion 3.10 $4.46 billion $2.67 12.86
Jerónimo Martins, SGPS $22.04 billion 0.57 $356.55 million $1.50 26.74

Shin-Etsu Chemical has higher earnings, but lower revenue than Jerónimo Martins, SGPS. Shin-Etsu Chemical is trading at a lower price-to-earnings ratio than Jerónimo Martins, SGPS, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Shin-Etsu Chemical and Jerónimo Martins, SGPS, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shin-Etsu Chemical 0 0 1 0 3.00
Jerónimo Martins, SGPS 1 3 2 0 2.17

Jerónimo Martins, SGPS has a consensus price target of $18.83, indicating a potential downside of 53.07%. Given Jerónimo Martins, SGPS’s higher possible upside, analysts clearly believe Jerónimo Martins, SGPS is more favorable than Shin-Etsu Chemical.

Profitability

This table compares Shin-Etsu Chemical and Jerónimo Martins, SGPS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shin-Etsu Chemical 24.09% 15.79% 13.54%
Jerónimo Martins, SGPS 2.05% 18.76% 4.58%

Insider and Institutional Ownership

0.0% of Shin-Etsu Chemical shares are owned by institutional investors. 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.

Risk and Volatility

Shin-Etsu Chemical has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, Jerónimo Martins, SGPS has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.

Summary

Shin-Etsu Chemical beats Jerónimo Martins, SGPS on 10 of the 15 factors compared between the two stocks.

About Shin-Etsu Chemical (Get Rating)

Shin-Etsu Chemical Co., Ltd. engages in the polyvinyl chloride (PVC)/chlor-alkali, semiconductor silicon, silicones, electronics and functional materials, specialty chemicals, processing, and trading and specialized businesses worldwide. It offers PVC for use in PVC pipes, plastic greenhouses, electric wire coating materials, PVC-framed windows, and siding materials; caustic soda for use in alumina, paper and pulp, cathode materials, and super-absorbent polymers; and sodium hypochlorite. The company also provides semiconductor silicon wafers for use as substrate materials in smartphones, personal computers, electronic devices, data centers, and automobiles; and compound semiconductor products for outdoor displays, traffic lights, in-vehicle stop lamps, and sensor light sources. In addition, it offers silicone products for use in cosmetics, buildings, lithium-ion batteries, plastic products, contact lenses, textile treatments, continuous positive airway pressure devices, ship-bottom paints, fuel efficient tires, and toys; rare earth magnets for use in hybrid cars, electric vehicles, industrial equipment, and home appliance; photoresists, photomask blanks, encapsulation materials, pellicles, and other products; and low dielectric materials, silane, multipurpose film materials, liquid fluoroelastomer, fluorinated anti-smudge coating, synthetic quartz, oxide single crystal, pyrolytic boron nitride, and anode materials. Further, the company provides cellulose derivatives; synthetic pheromones; polyvinyl alcohol; aroma chemicals; SOLBIN, a copolymer resin; silicon metal; and automobile dashboard audio and air conditioners, silicone catheters, wafer cases, rollers for OA equipment, PVC wrapping films, and vacuum assembling equipment, as well as engineering services. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. The company was incorporated in 1926 and is headquartered in Tokyo, Japan.

About Jerónimo Martins, SGPS (Get Rating)

Jerónimo Martins, SGPS, S.A. operates in the food distribution and specialized retail sectors in Portugal, Poland, and Colombia. The company operates through Portugal Retail; Portugal Cash & Carry; Poland Retail; Colombia Retail; and Others, Eliminations and Adjustments segments. It operates 3,250 food stores under the Biedronka name; and a chain of 290 health and beauty stores under the Hebe banner in Poland, as well as 819 food stores under the Ara name in Colombia. The company also operates 460 supermarkets under the Pingo Doce banner; and 38 stores and 4 platforms under the Recheio name in Portugal. In addition, it operates restaurants under the Pingo Doce name; Bem-Estar stores; and petrol stations and clothing under Code brand. Further, the company operates 20 kiosks and coffee shops under the Jeronymo name; and 21 chocolates and confectionary retail stores under Hussel name. Additionally, the company engages in human resources top management, real estate management and administration, training, and saline brackish waters aquaculture; wholesale of fruit and vegetables; retail management, consultancy, and logistics activities; the purchase and sale of real estate; growing of crops and farming of animals; retail sale of health and beauty products; manufacture of milk and dairy products; and provision of economic and accounting, business portfolio management, financial, and sea passenger water transport services. It is also involved in the trading and distribution of consumer goods; retail and wholesale of non-food products; other business support service activities; and provision of services in the area of wholesale and retail distribution. The company was founded in 1792 and is headquartered in Lisbon, Portugal. Jerónimo Martins, SGPS, S.A. is a subsidiary of Sociedade Francisco Manuel dos Santos, SGPS, S.E.

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