LyondellBasell Industries NV (NYSE: LYB) and Methanex Corporation (NASDAQ:MEOH) 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 profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.

Insider and Institutional Ownership

73.8% of LyondellBasell Industries NV shares are owned by institutional investors. Comparatively, 81.9% of Methanex Corporation shares are owned by institutional investors. 0.1% of LyondellBasell Industries NV shares are owned by company insiders. Comparatively, 1.0% of Methanex Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

LyondellBasell Industries NV pays an annual dividend of $3.60 per share and has a dividend yield of 3.7%. Methanex Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 2.3%. LyondellBasell Industries NV pays out 40.2% of its earnings in the form of a dividend. Methanex Corporation pays out 47.8% 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 NV has raised its dividend for 5 consecutive years. LyondellBasell Industries NV is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

LyondellBasell Industries NV has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500. Comparatively, Methanex Corporation has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.

Profitability

This table compares LyondellBasell Industries NV and Methanex Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LyondellBasell Industries NV 11.40% 60.87% 16.41%
Methanex Corporation 8.92% 12.43% 4.96%

Analyst Recommendations

This is a breakdown of current ratings and target prices for LyondellBasell Industries NV and Methanex Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LyondellBasell Industries NV 1 5 8 0 2.50
Methanex Corporation 1 4 8 0 2.54

LyondellBasell Industries NV presently has a consensus target price of $95.92, suggesting a potential downside of 0.98%. Methanex Corporation has a consensus target price of $59.62, suggesting a potential upside of 15.09%. Given Methanex Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Methanex Corporation is more favorable than LyondellBasell Industries NV.

Valuation & Earnings

This table compares LyondellBasell Industries NV and Methanex Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LyondellBasell Industries NV $31.95 billion 1.20 $6.14 billion $8.96 10.81
Methanex Corporation $2.58 billion 1.73 $572.88 million $2.51 20.64

LyondellBasell Industries NV has higher revenue and earnings than Methanex Corporation. LyondellBasell Industries NV is trading at a lower price-to-earnings ratio than Methanex Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

LyondellBasell Industries NV beats Methanex Corporation on 9 of the 16 factors compared between the two stocks.

LyondellBasell Industries NV Company Profile

LyondellBasell Industries N.V. is a chemical company. The Company operates in five segments: Olefins and Polyolefins-Americas (O&P-Americas), Olefins and Polyolefins-Europe, Asia, International (O&P-EAI), Intermediates and Derivatives (I&D), Refining and Technology. The O&P-Americas segment produces and markets olefins and co-products, polyethylene and polypropylene. The O&P-EAI segment produces and markets olefins and co-products, polyethylene and polypropylene. The I&D segment produces and markets propylene oxide (PO) and its derivatives, oxyfuels and related products, and intermediate chemicals, such as styrene monomer (SM), acetyls and ethylene oxides. The primary product of the Refining segment is refined products made from sulfur crude oil and other crude oils of various types and sources available on the United States Gulf Coast. The Technology segment develops and licenses chemical and polyolefin process technologies and manufactures and sells polyolefin catalysts.

Methanex Corporation Company Profile

Methanex Corp is a Canada-based producer and supplier of methanol to a range of international markets. The Company operates production sites in Canada, Chile, Egypt, New Zealand, the United States, as well as Trinidad and Tobago. Its global operations are supported by a global supply chain of terminals, storage facilities and a fleet of methanol ocean tankers. The Company’s subsidiary, Waterfront Shipping Company Limited, operates its fleet, which is made up of over 20 vessels ranging from 3,000 to 50,000 deadweight tons of capacity. It has over three production facilities in New Zealand that supply methanol primarily to customers in Asia Pacific. The Company operates over two plants in Trinidad, Titan and Atlas, which supply methanol to markets in North America, Europe, Asia Pacific and South America. Its joint venture facility in Egypt supplies methanol to markets in Europe and Asia Pacific. Its plant in Medicine Hat, Alberta, supplies methanol to customers in North America.

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