Financial Review: Brenntag (OTCMKTS:BNTGY) & Asahi Kasei (OTCMKTS:AHKSY)

Brenntag (OTCMKTS:BNTGY) and Asahi Kasei (OTCMKTS:AHKSY) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Valuation & Earnings

This table compares Brenntag and Asahi Kasei”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Brenntag	$17.57 billion	0.52	$580.22 million	$0.79	15.89
Asahi Kasei	$19.95 billion	0.52	$890.97 million	$1.16	12.88

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

Profitability

This table compares Brenntag and Asahi Kasei’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Brenntag	3.24%	11.47%	4.59%
Asahi Kasei	3.95%	7.48%	3.57%

Risk and Volatility

Brenntag has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Asahi Kasei has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500.

Dividends

Brenntag pays an annual dividend of $0.28 per share and has a dividend yield of 2.2%. Asahi Kasei pays an annual dividend of $0.41 per share and has a dividend yield of 2.7%. Brenntag pays out 35.4% of its earnings in the form of a dividend. Asahi Kasei pays out 35.3% 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. Asahi Kasei is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations for Brenntag and Asahi Kasei, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Brenntag	1	4	0	0	1.80
Asahi Kasei	0	1	0	0	2.00

Summary

Asahi Kasei beats Brenntag on 8 of the 12 factors compared between the two stocks.

About Brenntag

Brenntag SE purchases and supplies various industrial and specialty chemicals, and ingredients in Germany, Europe, the Middle East, Africa, the Americas, and the Asia Pacific. The company operates in two segments, Brenntag Essentials and Brenntag Specialties. It provides just-in-time delivery, product mixing, blending, repackaging, inventory management, and drum return handling. The company serves customers in various end-market industries, including nutrition, pharma, personal care, water treatment, and lubricants; and home, industrial, and institutional markets, as well as coatings and constructions, polymers, and rubber industries. The company was founded in 1874 and is based in Essen, Germany.

About Asahi Kasei

Asahi Kasei Corporation manufactures and sells chemicals. It offers caustic soda, chemical fertilizers, nitric acid, ammonia, acrylonitrile, methyl methacrylate, styrene, adipic acid, hexamethylene diamine, AH salt, propionitrile, sodium cyanide, acetonitrile, methacrylonitrile, cyclohexyl methacrylate, polyethylenes, polyethylenes powder, PMMA resin, polystyrene, polybutadiene rubbers, styrene/butadiene rubbers, clear styrenic copolymer, styrenic thermoplastic elastomer, hydrogenated styrenic elastomers, membranes and systems, functional materials, foams, purging compound, polyisocyanates, polycarbonatediol, aluminum paste, latex, photopolymers and platemaking systems, films, cyclohexanol, cyclohexane, and cyclohexene. The company also offers lithium-ion battery and lead-acid battery separators, plastic optical fibers, artificial suede, nylon 66 filament, polyamide 66, polyacetal, polyphenyene ether, polypropylene compounds, 3D cubic knitted fabric, noise suppression sheets, audio devices, photosensitive polyimide/PBO precursor, latent hardeners, glass fabrics, specialty products, explosion-bonded metal clads, lining fabrics, cupro and stretch fibers, oil-water separators, cellulose nanobeads, and flame-resistant and synthetic fiber; magnetic, current, and gas sensors; deodorizing, spunbond, cupro, multifunctional, and heat-press formable thermoplastic nonwoven; and ecorise, biocradle, and bemliese products. It provides bags and containers; cooking products; cleaners; plastic packet cutting products; cyclohexyl methacrylate, bonded anchors, and microcrystalline cellulose; pharmaceuticals and diagnostic reagents, dialyzers, therapeutic apheresis, virus removal filters, defibrillators, AEDs, automated CPRs, fluid resuscitation pumps, wearable defibrillators, temperature management systems, and data solutions; construction materials; and remodeling services, as well as develops homes and apartments. The company was founded in 1922 and is headquartered in Tokyo, Japan.