Financial Comparison: Shin-Etsu Chemical (OTCMKTS:SHECY) vs. LyondellBasell Industries (NYSE:LYB)

LyondellBasell Industries (NYSE:LYB) and Shin-Etsu Chemical (OTCMKTS:SHECY) are both large-cap basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Institutional & Insider Ownership

71.2% of LyondellBasell Industries shares are held by institutional investors. Comparatively, 0.0% of Shin-Etsu Chemical shares are held by institutional investors. 0.1% of LyondellBasell Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

LyondellBasell Industries pays an annual dividend of $5.48 per share and has a dividend yield of 10.5%. Shin-Etsu Chemical pays an annual dividend of $0.23 per share and has a dividend yield of 1.3%. LyondellBasell Industries pays out -146.1% of its earnings in the form of a dividend. Shin-Etsu Chemical pays out 26.4% 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. LyondellBasell Industries has increased its dividend for 14 consecutive years. LyondellBasell Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LyondellBasell Industries	-3.70%	7.50%	2.53%
Shin-Etsu Chemical	19.32%	10.77%	9.06%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for LyondellBasell Industries and Shin-Etsu Chemical, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LyondellBasell Industries	4	16	2	0	1.91
Shin-Etsu Chemical	0	1	0	0	2.00

LyondellBasell Industries presently has a consensus price target of $53.33, suggesting a potential upside of 2.55%. Given LyondellBasell Industries’ higher possible upside, equities analysts plainly believe LyondellBasell Industries is more favorable than Shin-Etsu Chemical.

Risk and Volatility

LyondellBasell Industries has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Shin-Etsu Chemical has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Valuation & Earnings

This table compares LyondellBasell Industries 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
LyondellBasell Industries	$40.30 billion	0.42	$1.37 billion	($3.75)	-13.87
Shin-Etsu Chemical	$16.82 billion	4.09	$3.56 billion	$0.87	19.92

Shin-Etsu Chemical has lower revenue, but higher earnings than LyondellBasell Industries. LyondellBasell Industries 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.

Summary

Shin-Etsu Chemical beats LyondellBasell Industries on 9 of the 17 factors compared between the two stocks.

About LyondellBasell Industries

LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.

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.