Eastman Chemical (NYSE: EMN) and Airgas (NYSE:ARG) are both basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Profitability

This table compares Eastman Chemical and Airgas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eastman Chemical 10.11% 22.54% 6.74%
Airgas 5.98% 15.44% 5.04%

Institutional and Insider Ownership

82.1% of Eastman Chemical shares are owned by institutional investors. 1.1% of Eastman Chemical shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Eastman Chemical and Airgas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eastman Chemical 0 4 5 0 2.56
Airgas 0 0 0 0 N/A

Eastman Chemical currently has a consensus price target of $90.00, indicating a potential upside of 2.63%. Given Eastman Chemical’s higher possible upside, equities analysts plainly believe Eastman Chemical is more favorable than Airgas.

Valuation and Earnings

This table compares Eastman Chemical and Airgas’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Eastman Chemical $9.20 billion 1.38 $2.15 billion $6.32 13.88
Airgas N/A N/A N/A N/A N/A

Eastman Chemical has higher revenue and earnings than Airgas.

Dividends

Eastman Chemical pays an annual dividend of $2.04 per share and has a dividend yield of 2.3%. Airgas does not pay a dividend. Eastman Chemical pays out 32.3% of its earnings in the form of a dividend. Eastman Chemical has raised its dividend for 5 consecutive years and Airgas has raised its dividend for 14 consecutive years.

Summary

Eastman Chemical beats Airgas on 9 of the 11 factors compared between the two stocks.

Eastman Chemical Company Profile

Eastman Chemical Company (Eastman) is an advanced materials and specialty additives company. The Company’s segments include Additives & Functional Products (AFP), Advanced Materials (AM), Chemical Intermediates (CI), and Fibers. In the AFP segment, it manufactures chemicals for products in the coatings, tires, consumables, building and construction, industrial applications, including solar energy markets, animal nutrition, care chemicals, crop protection, and energy markets. In the AM segment, it produces and markets its polymers, films, and plastics with differentiated performance properties for end uses in transportation, consumables, building and construction, durable goods, and health and wellness products. The CI segment leverages large scale and vertical integration from the cellulose and acetyl, olefins, and alkylamines streams to support its specialty operating segments. Its product lines in Fibers segment include Acetate Tow, Acetate Yarn and Acetyl Chemical Products.

Airgas Company Profile

Airgas, Inc. is a supplier of industrial, medical and specialty gases, and hard goods, such as welding equipment and related products. The Company is also a producer of atmospheric gases, carbon dioxide, dry ice and nitrous oxide and a supplier of safety products, refrigerants, ammonia products and process chemicals. It operates through two segments: Distribution and All Other Operations. The Distribution segment offers a portfolio of related gas and hard goods products and services to the end customers. The All Other Operations segment consists of five business units which manufacture or distribute carbon dioxide, dry ice, nitrous oxide, ammonia and refrigerant gases. It also offers supply chain management services and solutions, and product and process technical support across many customer segments. It markets its products and services through multiple sales channels, including branch-based sales representatives, retail stores and strategic customer account programs, among others.

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