Head to Head Survey: Methanex (NASDAQ:MEOH) and Shin-Etsu Chemical (OTCMKTS:SHECY)

Methanex (NASDAQ:MEOH) and Shin-Etsu Chemical (OTCMKTS:SHECY) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Risk and Volatility

Methanex has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Shin-Etsu Chemical has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500.

Valuation & Earnings

This table compares Methanex and Shin-Etsu Chemical”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Methanex	$3.72 billion	0.83	$163.99 million	$3.39	11.74
Shin-Etsu Chemical	$16.82 billion	3.52	$3.56 billion	$0.88	16.95

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

Dividends

Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 1.9%. Shin-Etsu Chemical pays an annual dividend of $0.25 per share and has a dividend yield of 1.7%. Methanex pays out 21.8% of its earnings in the form of a dividend. Shin-Etsu Chemical pays out 28.4% 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. Methanex has raised its dividend for 4 consecutive years. Methanex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Methanex	7.02%	12.61%	4.66%
Shin-Etsu Chemical	19.94%	10.90%	9.31%

Institutional & Insider Ownership

73.5% of Methanex shares are owned by institutional investors. Comparatively, 0.0% of Shin-Etsu Chemical shares are owned by institutional investors. 1.0% of Methanex shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Methanex and Shin-Etsu Chemical, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Methanex	0	2	5	1	2.88
Shin-Etsu Chemical	1	0	0	0	1.00

Methanex presently has a consensus price target of $44.88, suggesting a potential upside of 12.72%. Given Methanex’s stronger consensus rating and higher probable upside, analysts clearly believe Methanex is more favorable than Shin-Etsu Chemical.

Summary

Methanex beats Shin-Etsu Chemical on 11 of the 18 factors compared between the two stocks.

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.

About Shin-Etsu Chemical

Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.