Albemarle (NYSE:ALB) and Akzo Nobel (OTCMKTS:AKZOY) Critical Contrast

Akzo Nobel (OTCMKTS:AKZOY) and Albemarle (NYSE:ALB) are both basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, profitability, valuation and earnings.

Profitability

This table compares Akzo Nobel and Albemarle’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Akzo Nobel	6.49%	13.73%	4.39%
Albemarle	-10.74%	0.41%	0.19%

Risk and Volatility

Akzo Nobel has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Albemarle has a beta of 1.43, indicating that its stock price is 43% more volatile than the S&P 500.

Institutional & Insider Ownership

0.4% of Akzo Nobel shares are owned by institutional investors. Comparatively, 92.9% of Albemarle shares are owned by institutional investors. 0.3% of Albemarle shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Akzo Nobel and Albemarle”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Akzo Nobel	$11.49 billion	0.84	$718.44 million	$1.41	13.26
Albemarle	$5.14 billion	4.11	-$510.63 million	($5.75)	-31.19

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

Dividends

Akzo Nobel pays an annual dividend of $0.25 per share and has a dividend yield of 1.3%. Albemarle pays an annual dividend of $1.62 per share and has a dividend yield of 0.9%. Akzo Nobel pays out 17.7% of its earnings in the form of a dividend. Albemarle pays out -28.2% 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. Albemarle has raised its dividend for 30 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Akzo Nobel and Albemarle, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Akzo Nobel	1	4	0	1	2.17
Albemarle	2	11	13	2	2.54

Albemarle has a consensus target price of $170.24, indicating a potential downside of 5.07%. Given Albemarle’s stronger consensus rating and higher possible upside, analysts plainly believe Albemarle is more favorable than Akzo Nobel.

Summary

Albemarle beats Akzo Nobel on 10 of the 18 factors compared between the two stocks.

About Akzo Nobel

Akzo Nobel N.V. engages in the production and sale of paints and coatings worldwide. The company operates through two segments: Decorative Paints and Performance Coatings. It offers decorative paints, including paints, lacquers, and varnishes; and a range of mixing machines and color concepts for the building and renovation industry, as well as specialty coatings. The company also provides performance coatings that protect and enhance ships, cars, aircraft, yachts, architectural components, consumer goods, and oil and gas facilities. It offers its products under AkzoNobel, Alabastine, Alba, Andercol, Apla, Armstead Trade, Astral, Astral Batiment, AwlGrip, Brikol, Dulux, Bruguer, Cetabever, Cetol, Chemcraft, Colourland Paints, CONSOLAN, Coral, Cromadex, Cuprinol, Dynacoat, Flexa, Glitsa, Grip-Gard, Herbol, Hammerite, International, Interlux, Innenweis, Interpon, Inca, Luxol, Levis, Lesonal, Molto, Modern Classikk, Maxilite, Mauvilac, Mason CT, Marshall, Mactra, Nordsjo, Oxirite, Protecto, Procolor, Polyfilla, Polycell, Pinotex, Pintuco, Resicoat, Relest, Sparlack, Sadolin, Sikkens, Sea Hawk, Savana, Salcomix, Trimetal, Titanlux, Taubmans, U-tech, Vpowdertech, Vivechrom, Xylazel, Xyladecor, Wanda, and Zweihorn brands. The company serves to energy, packaging, infrastructure, and shipbuilding and maintenance industries, as well as general industries, such as agricultural and construction equipment, construction-related steel, metal fabrication, pipes, appliances, and transportation. The company was formerly known as Akzo NV and changed its name to Akzo Nobel N.V. in 1994. Akzo Nobel N.V. was founded in 1646 and is headquartered in Amsterdam, the Netherlands.

About Albemarle

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments: Energy Storage, Specialties and Ketjen. The Energy Storage segment offers lithium compounds, including lithium carbonate, lithium hydroxide, and lithium chloride; technical services for the handling and use of reactive lithium products; and lithium-containing by-products recycling services. The Specialties segment provides bromine-based specialty chemicals, including elemental bromine, alkyl and inorganic bromides, brominated powdered activated carbon, and other bromine fine chemicals; lithium specialties, such as butyllithium and lithium aluminum hydride; develops and manufactures cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for pyrotechnical applications that include airbag initiators. The Ketjen segment offers clean fuels technologies (CFT), which is composed of hydroprocessing catalysts (HPC) together with isomerization and akylation catalysts; fluidized catalytic cracking (FCC) catalysts and additives; and performance catalyst solutions (PCS), which is composed of organometallics and curatives. The company serves the energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, and crop protection markets. Albemarle Corporation was founded in 1887 and is headquartered in Charlotte, North Carolina.