Critical Review: Avient (NYSE:AVNT) vs. Asahi Kasei (OTCMKTS:AHKSY)

Asahi Kasei (OTCMKTS:AHKSY) and Avient (NYSE:AVNT) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, risk, analyst recommendations and institutional ownership.

Dividends

Asahi Kasei pays an annual dividend of $0.31 per share and has a dividend yield of 1.6%. Avient pays an annual dividend of $1.10 per share and has a dividend yield of 3.0%. Asahi Kasei pays out 20.3% of its earnings in the form of a dividend. Avient pays out 123.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avient has increased its dividend for 1 consecutive years. Avient is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Asahi Kasei and Avient’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Asahi Kasei	5.14%	8.26%	4.01%
Avient	2.51%	10.95%	4.31%

Analyst Ratings

This is a summary of recent ratings and target prices for Asahi Kasei and Avient, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Asahi Kasei	0	2	0	1	2.67
Avient	0	5	2	0	2.29

Avient has a consensus price target of $47.00, indicating a potential upside of 29.54%. Given Avient’s higher possible upside, analysts plainly believe Avient is more favorable than Asahi Kasei.

Insider and Institutional Ownership

95.5% of Avient shares are held by institutional investors. 0.9% of Avient shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Asahi Kasei and Avient”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Asahi Kasei	$19.95 billion	0.68	$890.97 million	$1.53	12.80
Avient	$3.26 billion	1.02	$81.90 million	$0.89	40.77

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

Risk and Volatility

Asahi Kasei has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, Avient has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.

Summary

Avient beats Asahi Kasei on 11 of the 18 factors compared between the two stocks.

About Asahi Kasei

Asahi Kasei Corporation manufactures and sells chemicals. It offers caustic soda, chemical fertilizers, nitric acid, ammonia, acrylonitrile, methyl methacrylate, styrene, adipic acid, hexamethylene diamine, AH salt, propionitrile, sodium cyanide, acetonitrile, methacrylonitrile, cyclohexyl methacrylate, polyethylenes, polyethylenes powder, PMMA resin, polystyrene, polybutadiene rubbers, styrene/butadiene rubbers, clear styrenic copolymer, styrenic thermoplastic elastomer, hydrogenated styrenic elastomers, membranes and systems, functional materials, foams, purging compound, polyisocyanates, polycarbonatediol, aluminum paste, latex, photopolymers and platemaking systems, films, cyclohexanol, cyclohexane, and cyclohexene. The company also offers lithium-ion battery and lead-acid battery separators, plastic optical fibers, artificial suede, nylon 66 filament, polyamide 66, polyacetal, polyphenyene ether, polypropylene compounds, 3D cubic knitted fabric, noise suppression sheets, audio devices, photosensitive polyimide/PBO precursor, latent hardeners, glass fabrics, specialty products, explosion-bonded metal clads, lining fabrics, cupro and stretch fibers, oil-water separators, cellulose nanobeads, and flame-resistant and synthetic fiber; magnetic, current, and gas sensors; deodorizing, spunbond, cupro, multifunctional, and heat-press formable thermoplastic nonwoven; and ecorise, biocradle, and bemliese products. It provides bags and containers; cooking products; cleaners; plastic packet cutting products; cyclohexyl methacrylate, bonded anchors, and microcrystalline cellulose; pharmaceuticals and diagnostic reagents, dialyzers, therapeutic apheresis, virus removal filters, defibrillators, AEDs, automated CPRs, fluid resuscitation pumps, wearable defibrillators, temperature management systems, and data solutions; construction materials; and remodeling services, as well as develops homes and apartments. The company was founded in 1922 and is headquartered in Tokyo, Japan.

About Avient

Avient Corporation operates as a formulator of material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in two segments, Color, Additives and Inks; and Specialty Engineered Materials. The Color, Additives and Inks segment offers custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, and specialty inks; custom-formulated liquid system, such as polyester, vinyl, natural rubber and latex, polyurethane, and silicone; and proprietary inks. Its products are used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable, recreational and athletic apparel, construction and filtration, outdoor furniture, healthcare, textiles and appliances, and industrial markets. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials. It sells its products through direct sales personnel, distributors, and commissioned sales agents. The company was formerly known as PolyOne Corporation and changed its name to Avient Corporation in June 2020. Avient Corporation was founded in 1885 and is headquartered in Avon Lake, Ohio.