Dow Chemical Company (The) (NYSE: DWDP) and PolyOne Corporation (NYSE:POL) are both mid-cap diversified chemicals companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Profitability

This table compares Dow Chemical Company (The) and PolyOne Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dow Chemical Company (The) 5.01% 9.73% 4.18%
PolyOne Corporation -1.87% 27.77% 6.61%

Institutional & Insider Ownership

74.8% of Dow Chemical Company (The) shares are owned by institutional investors. Comparatively, 96.8% of PolyOne Corporation shares are owned by institutional investors. 0.9% of Dow Chemical Company (The) shares are owned by insiders. Comparatively, 1.6% of PolyOne Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Dow Chemical Company (The) and PolyOne Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dow Chemical Company (The) 1 3 16 0 2.75
PolyOne Corporation 0 1 5 0 2.83

Dow Chemical Company (The) presently has a consensus price target of $79.41, suggesting a potential upside of 12.26%. PolyOne Corporation has a consensus price target of $43.17, suggesting a potential downside of 3.67%. Given Dow Chemical Company (The)’s higher probable upside, analysts clearly believe Dow Chemical Company (The) is more favorable than PolyOne Corporation.

Earnings and Valuation

This table compares Dow Chemical Company (The) and PolyOne Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Dow Chemical Company (The) $48.16 billion 3.44 $4.32 billion N/A N/A
PolyOne Corporation $3.34 billion 1.08 $165.20 million ($0.76) -58.96

Dow Chemical Company (The) has higher revenue and earnings than PolyOne Corporation.

Dividends

Dow Chemical Company (The) pays an annual dividend of $1.52 per share and has a dividend yield of 2.1%. PolyOne Corporation pays an annual dividend of $0.54 per share and has a dividend yield of 1.2%. PolyOne Corporation pays out -71.1% of its earnings in the form of a dividend. Dow Chemical Company (The) has raised its dividend for 5 consecutive years. Dow Chemical Company (The) is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Dow Chemical Company (The) beats PolyOne Corporation on 8 of the 15 factors compared between the two stocks.

About Dow Chemical Company (The)

DowDuPont Inc. is a holding company formed through the merger of equals between The Dow Chemical Company and E. I. du Pont de Nemours and Company (DuPont). The Company’s business divisions include Agriculture division, Material Science division, and a Specialty Products division. The Agriculture Division offers a complete portfolio of products and technologies, and a pipeline of germplasm, traits and crop protection. The Materials Science Division provides solutions, such as packaging, transportation, infrastructure and customer care. The Specialty Products division provides solution for industrial, safety, energy, food, nutrition, construction, electronics and consumer goods industries. The company provides solutions to a range of markets, including aerospace, automotive, consumer electronics, military, printing, renewable energy, semiconductors, child nutrition, dietary supplements, carpet and apparel, fertilizer, and oil and gas/energy.

About PolyOne Corporation

PolyOne Corporation (PolyOne) provides specialized polymer materials, services and solutions. The Company’s segments include Color, Additives and Inks; Specialty Engineered Materials; Performance Products and Solutions, and PolyOne Distribution. The Color, Additives and Inks segment provides custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets. The Specialty Engineered Materials segment provides specialty polymer formulations, services and solutions for designers, assemblers and processors of thermoplastic materials. The Performance Products and Solutions segment consists of the Geon Performance Materials and Producer Services business units. As of December 31, 2016, the PolyOne Distribution segment distributed more than 4,000 grades of engineering and commodity grade resins.

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