Analyzing Perimeter Solutions (NYSE:PRM) & Celanese (NYSE:CE)

Celanese (NYSE:CE) and Perimeter Solutions (NYSE:PRM) are both mid-cap basic materials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Volatility and Risk

Celanese has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500. Comparatively, Perimeter Solutions has a beta of 1.96, suggesting that its share price is 96% more volatile than the S&P 500.

Profitability

This table compares Celanese and Perimeter Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Celanese	-31.85%	9.87%	2.29%
Perimeter Solutions	12.26%	17.33%	8.12%

Institutional and Insider Ownership

98.9% of Celanese shares are owned by institutional investors. Comparatively, 89.9% of Perimeter Solutions shares are owned by institutional investors. 0.3% of Celanese shares are owned by company insiders. Comparatively, 10.0% of Perimeter Solutions shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Celanese and Perimeter Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Celanese	3	11	7	0	2.19
Perimeter Solutions	0	1	2	1	3.00

Celanese presently has a consensus target price of $54.78, indicating a potential upside of 37.37%. Perimeter Solutions has a consensus target price of $26.00, indicating a potential downside of 7.30%. Given Celanese’s higher possible upside, research analysts clearly believe Celanese is more favorable than Perimeter Solutions.

Valuation and Earnings

This table compares Celanese and Perimeter Solutions”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Celanese	$10.28 billion	0.42	-$1.52 billion	($28.27)	-1.41
Perimeter Solutions	$560.97 million	7.40	-$5.91 million	$0.42	66.78

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

Summary

Perimeter Solutions beats Celanese on 11 of the 15 factors compared between the two stocks.

About Celanese

Celanese Corporation, a chemical and specialty materials company, manufactures and sells high performance engineered polymers in the United States and internationally. It operates through Engineered Materials and Acetyl Chain. The Engineered Materials segment develops, produces, and supplies specialty polymers for automotive and medical applications, as well as for use in industrial products and consumer electronics. The Acetyl Chain segment produces and supplies acetyl products, including acetic acid, vinyl acetate monomers, acetic anhydride, and acetate esters that are used as starting materials for colorants, paints, adhesives, coatings, and pharmaceuticals; and organic solvents and intermediates for pharmaceutical, agricultural, and chemical products. It also offers vinyl acetate-based emulsions for use in paints and coatings, adhesives, construction, glass fiber, textiles, and paper applications; and ethylene vinyl acetate resins and compounds, as well as low-density polyethylene for use in flexible packaging films, lamination film products, hot melt adhesives, automotive parts, and carpeting applications. In addition, it provides redispersible powders (RDP) for use in construction applications, including flooring, plasters, insulation, tiling, and waterproofing. Celanese Corporation was founded in 1918 and is headquartered in Irving, Texas.

About Perimeter Solutions

Perimeter Solutions, SA manufactures and supplies firefighting products and lubricant additives in the United States, Germany, and internationally. It operates in two segments, Fire Safety and Specialty Products. The Fire Safety segment provides fire retardants and firefighting foams, as well as specialized equipment and services for federal, state, provincial, local/municipal, and commercial customers. The Specialty Products segment produces and sells Phosphorus Pentasulfide, which is primarily used in the preparation of lubricant additives, including a family of compounds called Zinc Dialkyldithiophosphates. The company offers its products under the PHOS-CHEK, FIRE-TROL, AUXQUIMIA, and SOLBERG brands. Perimeter Solutions, SA was founded in 1963 and is headquartered in Clayton, Missouri.