Critical Review: Celanese (NYSE:CE) versus H. B. Fuller (NYSE:FUL)

Celanese (NYSE:CE) and H. B. Fuller (NYSE:FUL) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Celanese and H. B. Fuller, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Celanese	2	8	9	0	2.37
H. B. Fuller	1	2	3	1	2.57

Celanese presently has a consensus price target of $63.65, suggesting a potential upside of 2.58%. H. B. Fuller has a consensus price target of $65.50, suggesting a potential upside of 1.80%. Given Celanese’s higher possible upside, analysts plainly believe Celanese is more favorable than H. B. Fuller.

Profitability

This table compares Celanese and H. B. Fuller’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Celanese	-12.15%	8.75%	1.94%
H. B. Fuller	4.62%	11.84%	4.52%

Valuation & Earnings

This table compares Celanese and H. B. Fuller”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Celanese	$9.54 billion	0.71	-$1.17 billion	($10.60)	-5.85
H. B. Fuller	$3.47 billion	1.01	$151.97 million	$3.03	21.24

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

Dividends

Celanese pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. H. B. Fuller pays an annual dividend of $0.94 per share and has a dividend yield of 1.5%. Celanese pays out -1.1% of its earnings in the form of a dividend. H. B. Fuller pays out 31.0% 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. H. B. Fuller has raised its dividend for 57 consecutive years. H. B. Fuller is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Celanese has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, H. B. Fuller has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Insider and Institutional Ownership

98.9% of Celanese shares are owned by institutional investors. Comparatively, 95.9% of H. B. Fuller shares are owned by institutional investors. 0.3% of Celanese shares are owned by company insiders. Comparatively, 1.8% of H. B. Fuller shares are owned 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.

Summary

H. B. Fuller beats Celanese on 13 of the 18 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 H. B. Fuller

H.B. Fuller Company, together with its subsidiaries, formulates, manufactures, and markets adhesives, sealants, coatings, polymers, tapes, encapsulants, additives, and other specialty chemical products. It operates through three segments: Hygiene, Health and Consumable Adhesives; Engineering Adhesives; and Construction Adhesives. The Hygiene, Health and Consumable Adhesives segment produces and supplies specialty industrial adhesives, such as thermoplastic, thermoset, reactive, water-based, and solvent-based products for applications in various markets, including packaging, converting, nonwoven and hygiene, and health and beauty. The Engineering Adhesives segment produces and supplies high performance industrial adhesives comprising reactive, light cure, two-part liquids, polyurethane, silicone, film, and fast cure products to the durable assembly, performance wood and textile, transportation, electronics, clean energy, aerospace and defense, appliance, heavy machinery, and insulating glass markets. The Construction Adhesives segment provides products used for tile setting, commercial roofing, heating, ventilation, and air conditioning and insulation applications, as well as caulks and sealants for the consumer market and professional trade. The company sells its products directly to customers, as well as through distributors and retailers in the Americas, Europe, India, the Middle East, Africa, and the Asia Pacific. H.B. Fuller Company was founded in 1887 and is headquartered in Saint Paul, Minnesota.