Comparing Mitsubishi Chemical (OTCMKTS:MTLHY) and Innospec (NASDAQ:IOSP)

Mitsubishi Chemical (OTCMKTS:MTLHY) and Innospec (NASDAQ:IOSP) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Insider and Institutional Ownership

96.6% of Innospec shares are held by institutional investors. 1.3% of Innospec shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Mitsubishi Chemical and Innospec’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Mitsubishi Chemical	0.62%	0.98%	0.38%
Innospec	1.08%	10.89%	7.70%

Analyst Ratings

This is a summary of current recommendations for Mitsubishi Chemical and Innospec, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mitsubishi Chemical	0	0	0	0	0.00
Innospec	0	2	0	1	2.67

Risk & Volatility

Mitsubishi Chemical has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Innospec has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Dividends

Mitsubishi Chemical pays an annual dividend of $0.75 per share and has a dividend yield of 2.7%. Innospec pays an annual dividend of $1.68 per share and has a dividend yield of 2.3%. Mitsubishi Chemical pays out 123.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Innospec pays out 215.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Innospec has raised its dividend for 11 consecutive years. Mitsubishi Chemical is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Mitsubishi Chemical and Innospec”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mitsubishi Chemical	$28.94 billion	0.28	$297.13 million	$0.61	46.39
Innospec	$1.85 billion	1.00	$35.60 million	$0.78	95.42

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

Summary

Innospec beats Mitsubishi Chemical on 12 of the 16 factors compared between the two stocks.

About Mitsubishi Chemical

Mitsubishi Chemical Group Corporation provides performance products, chemicals, industrial gases, health care products, and other products in Japan and internationally. It operates in five segments: Specialty Materials, Industrial Gases, Health Care, MMA, and Basic Materials. The Specialty Materials segment offers performance polymers, soarnol, gohsenol, sustainable polymers, and engineering plastics; coating materials, additives, and fines; packaging, industrial and medical, acetyl, and polyester films; engineering shapes and solutions, carbon fiber and composite materials, and fibers; aqua, life, and infrastructure solutions; and semiconductor, electronics, and battery materials. The Industrial Gases segment provides industrial gases. The Health Care segment offers ethical pharmaceuticals. The MMA segment provides methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). The Basic Materials segment offers basic petrochemicals, polyolefins, and basic chemical derivatives, as well as carbon products. The company provides engineering, transportation, and warehousing services. Mitsubishi Chemical Group Corporation was incorporated in 2005 and is headquartered in Tokyo, Japan.

About Innospec

Innospec Inc. develops, manufactures, blends, markets, and supplies specialty chemicals in the United States, rest of North America, the United Kingdom, rest of Europe, and internationally. The company's Fuel Specialties segment offers a range of specialty chemical products that are used as additives in additives in diesel, jet, marine, fuel oil and other fuels. This segment's products are used in the operation of commercial trucking, marine and aviation engines, power station generators, heating oil, and other industrial machinery applications. Its Performance Chemicals segment provides technology-based solutions for its customers' processes or products that focuses on the personal care, home care, agrochemical, construction, mining, and other industrial markets. The company's Oilfield Services segment develops and markets chemical solutions for drilling, completion, fracturing, stimulation, and completion operations; and products for oil and gas production. It sells its products primarily to oil and gas exploration and production companies, oil refineries, fuel manufacturers and users, personal care and home care companies, formulators of agrochemical, and other chemical and industrial companies. The company was formerly known as Octel Corp. and changed its name to Innospec Inc. in January 2006. Innospec Inc. was founded in 1938 and is headquartered in Englewood, Colorado.