Head to Head Contrast: Tokuyama (OTCMKTS:TKYMY) versus Albemarle (NYSE:ALB)

Tokuyama (OTCMKTS:TKYMY) and Albemarle (NYSE:ALB) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Risk & Volatility

Tokuyama has a beta of 0.14, suggesting that its stock price is 86% less volatile than the S&P 500. Comparatively, Albemarle has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500.

Profitability

This table compares Tokuyama and Albemarle’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tokuyama	6.10%	8.31%	4.75%
Albemarle	-18.61%	-1.87%	-0.89%

Insider and Institutional Ownership

92.9% of Albemarle shares are held by institutional investors. 0.3% of Albemarle shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Tokuyama pays an annual dividend of $0.23 per share and has a dividend yield of 2.1%. Albemarle pays an annual dividend of $1.62 per share and has a dividend yield of 2.2%. Tokuyama pays out 23.7% of its earnings in the form of a dividend. Albemarle pays out -17.4% 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. Albemarle has increased its dividend for 30 consecutive years. Albemarle is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Tokuyama and Albemarle”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tokuyama	$2.25 billion	0.70	$154.35 million	$0.97	11.21
Albemarle	$5.38 billion	1.59	-$1.18 billion	($9.32)	-7.80

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Tokuyama and Albemarle, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tokuyama	0	0	0	0	0.00
Albemarle	4	10	3	0	1.94

Albemarle has a consensus target price of $86.47, indicating a potential upside of 18.96%. Given Albemarle’s stronger consensus rating and higher probable upside, analysts clearly believe Albemarle is more favorable than Tokuyama.

Summary

Albemarle beats Tokuyama on 11 of the 17 factors compared between the two stocks.

About Tokuyama

Tokuyama Corporation produces and sells various chemical products in Japan. The company operates through six segments: Chemicals, Cement, Electronics and Advanced Materials, Life Science, Eco Business, and Others. The Chemicals segment offers caustic soda, soda ash, calcium chloride, sodium silicate cullet, sodium bicarbonate, purified, vinyl chloride monomer, polyvinyl chloride resin, propylene oxide, methylene chloride, and chloroform. The Cement segment provides cement, ready-mixed concrete, and cement-type stabilizer, as well as engages in the resource recycling business. The Electronic and Advanced Materials segment provides polycrystalline silicon; fumed silica and tetrachlorosilane; aluminum nitride; high-purity chemicals for electronics manufacturing and photoresist developer; and isopropyl alcohol. The Life Science segment provides medical diagnosis systems, dental materials and equipment, pharmaceutical ingredients and intermediates, plastic lens-related materials for glasses, and microporous film. The Eco Business segment offers plastic window sashes, ion exchange membranes, as well as engages in waste gypsum board recycling activity. The company was formerly known as Tokuyama Soda Co., Ltd. and changed its name to Tokuyama Corporation in April 1994. Tokuyama Corporation was incorporated in 1918 and is headquartered in Tokyo, Japan.

About Albemarle

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments: Energy Storage, Specialties and Ketjen. The Energy Storage segment offers lithium compounds, including lithium carbonate, lithium hydroxide, and lithium chloride; technical services for the handling and use of reactive lithium products; and lithium-containing by-products recycling services. The Specialties segment provides bromine-based specialty chemicals, including elemental bromine, alkyl and inorganic bromides, brominated powdered activated carbon, and other bromine fine chemicals; lithium specialties, such as butyllithium and lithium aluminum hydride; develops and manufactures cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for pyrotechnical applications that include airbag initiators. The Ketjen segment offers clean fuels technologies (CFT), which is composed of hydroprocessing catalysts (HPC) together with isomerization and akylation catalysts; fluidized catalytic cracking (FCC) catalysts and additives; and performance catalyst solutions (PCS), which is composed of organometallics and curatives. The company serves the energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, and crop protection markets. Albemarle Corporation was founded in 1887 and is headquartered in Charlotte, North Carolina.