Brenntag (OTCMKTS:BNTGY) versus Mitsubishi Chemical (OTCMKTS:MTLHY) Critical Survey

Mitsubishi Chemical (OTCMKTS:MTLHY) and Brenntag (OTCMKTS:BNTGY) are both mid-cap basic materials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Valuation and Earnings

This table compares Mitsubishi Chemical and Brenntag”s gross revenue, earnings per share (EPS) 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	45.79
Brenntag	$17.57 billion	0.46	$580.22 million	$0.64	17.41

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

Risk & Volatility

Mitsubishi Chemical has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Brenntag has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.

Profitability

This table compares Mitsubishi Chemical and Brenntag’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%
Brenntag	2.66%	9.14%	3.69%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mitsubishi Chemical	0	0	0	0	0.00
Brenntag	2	6	0	0	1.75

Brenntag has a consensus target price of $12.80, indicating a potential upside of 14.90%. Given Brenntag’s stronger consensus rating and higher probable upside, analysts plainly believe Brenntag is more favorable than Mitsubishi Chemical.

Dividends

Mitsubishi Chemical pays an annual dividend of $0.69 per share and has a dividend yield of 2.5%. Brenntag pays an annual dividend of $0.28 per share and has a dividend yield of 2.5%. Mitsubishi Chemical pays out 113.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Brenntag pays out 43.8% of its earnings in the form of a dividend. Brenntag is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Brenntag beats Mitsubishi Chemical on 11 of the 13 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 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.