Critical Review: Shin-Etsu Chemical (OTCMKTS:SHECY) versus Johnson Matthey (OTCMKTS:JMPLY)

Shin-Etsu Chemical (OTCMKTS:SHECY) and Johnson Matthey (OTCMKTS:JMPLY) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Volatility and Risk

Shin-Etsu Chemical has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Johnson Matthey has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Institutional & Insider Ownership

0.0% of Shin-Etsu Chemical shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Shin-Etsu Chemical	19.32%	10.77%	9.06%
Johnson Matthey	N/A	N/A	N/A

Dividends

Shin-Etsu Chemical pays an annual dividend of $0.23 per share and has a dividend yield of 1.3%. Johnson Matthey pays an annual dividend of $1.11 per share and has a dividend yield of 1.8%. Shin-Etsu Chemical pays out 26.4% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and price targets for Shin-Etsu Chemical and Johnson Matthey, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shin-Etsu Chemical	0	1	0	0	2.00
Johnson Matthey	0	3	0	2	2.80

Earnings & Valuation

This table compares Shin-Etsu Chemical and Johnson Matthey”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shin-Etsu Chemical	$16.82 billion	4.19	$3.56 billion	$0.87	20.40
Johnson Matthey	$14.89 billion	0.36	$475.91 million	N/A	N/A

Shin-Etsu Chemical has higher revenue and earnings than Johnson Matthey.

Summary

Shin-Etsu Chemical beats Johnson Matthey on 8 of the 12 factors compared between the two stocks.

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.

About Johnson Matthey

Johnson Matthey is a global leader in science that enables a cleaner and healthier world. With over 200 years of sustained commitment to innovation and technological breakthroughs, they improve the function, performance and safety of their customers’ products. Their science has a global impact in areas such as low emission transport, pharmaceuticals, chemical processing and making the most efficient use of the planet’s natural resources. Today more than 13,000 Johnson Matthey professionals collaborate with their network of customers and partners to make a real difference to the world around us.