Analyzing Huntsman (NYSE:HUN) & Mitsubishi Chemical (OTCMKTS:MTLHY)

Mitsubishi Chemical (OTCMKTS:MTLHY) and Huntsman (NYSE:HUN) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Dividends

Mitsubishi Chemical pays an annual dividend of $0.69 per share and has a dividend yield of 2.4%. Huntsman pays an annual dividend of $0.35 per share and has a dividend yield of 3.5%. 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. Huntsman pays out -18.4% of its earnings in the form of a dividend. Huntsman has increased its dividend for 4 consecutive years. Huntsman is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Mitsubishi Chemical and Huntsman”s top-line 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	0.29	$297.13 million	$0.61	48.07
Huntsman	$6.04 billion	0.29	-$189.00 million	($1.90)	-5.31

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

Profitability

This table compares Mitsubishi Chemical and Huntsman’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%
Huntsman	-5.69%	-3.26%	-1.41%

Institutional and Insider Ownership

84.8% of Huntsman shares are owned by institutional investors. 6.2% of Huntsman shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Mitsubishi Chemical and Huntsman, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mitsubishi Chemical	0	0	0	0	0.00
Huntsman	4	7	2	0	1.85

Huntsman has a consensus target price of $10.23, indicating a potential upside of 1.31%. Given Huntsman’s stronger consensus rating and higher probable upside, analysts clearly believe Huntsman is more favorable than Mitsubishi Chemical.

Risk & Volatility

Mitsubishi Chemical has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Huntsman has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Summary

Huntsman beats Mitsubishi Chemical on 9 of the 17 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 Huntsman

Huntsman Corporation manufactures and sells diversified organic chemical products worldwide. The company operates in three segments: Polyurethanes, Performance Products, and Advanced Materials. The Polyurethanes segment offers polyurethane chemicals, including methyl diphenyl diisocyanate, polyether and polyester polyols, and thermoplastic polyurethane; and aniline, benzene, nitrobenzene and other co-products. The Performance Products segment manufactures amines, such as polyetheramines, ethyleneamines, DGA Agent, JEFFCAT catalysts, and E-GRADE specialty amines and carbonates; and maleic anhydrides. The Advanced Materials segment offers epoxy, phenoxy, acrylic, polyurethane, and acrylonitrile-butadiene-based polymer formulations; and thermoset resins, curing and toughening agents, and carbon nanomaterials. The company provides pre-and post-sales technical service support to customers. Its products are used in a range of applications, including adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, insulation, packaging, coatings and construction, power generation, and refining, as well as serves the elastomers, insulation, footwear, furniture, industrial, oil and gas, liquid natural gas transport, printed circuit boards, consumer, appliances, electrical power transmission and distribution, recreational sports equipment, and medical appliances markets. The company sells its products through a network of distributors and agents. Huntsman Corporation was founded in 1970 and is headquartered in The Woodlands, Texas.