LyondellBasell Industries (NYSE:LYB) & Mitsubishi Chemical (OTCMKTS:MTLHY) Critical Analysis

LyondellBasell Industries (NYSE:LYB) and Mitsubishi Chemical (OTCMKTS:MTLHY) are both large-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for LyondellBasell Industries and Mitsubishi Chemical, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LyondellBasell Industries	3	8	8	2	2.43
Mitsubishi Chemical	0	0	0	0	0.00

LyondellBasell Industries presently has a consensus target price of $76.71, suggesting a potential upside of 24.17%. Given LyondellBasell Industries’ stronger consensus rating and higher possible upside, equities analysts plainly believe LyondellBasell Industries is more favorable than Mitsubishi Chemical.

Institutional and Insider Ownership

71.2% of LyondellBasell Industries shares are owned by institutional investors. 0.1% of LyondellBasell Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares LyondellBasell Industries and Mitsubishi Chemical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LyondellBasell Industries	-2.68%	5.68%	1.77%
Mitsubishi Chemical	N/A	N/A	N/A

Valuation and Earnings

This table compares LyondellBasell Industries and Mitsubishi Chemical”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LyondellBasell Industries	$29.67 billion	0.67	-$738.00 million	($2.49)	-24.81
Mitsubishi Chemical	$24.61 billion	0.41	$78.58 million	$0.61	56.89

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

Dividends

LyondellBasell Industries pays an annual dividend of $2.76 per share and has a dividend yield of 4.5%. Mitsubishi Chemical pays an annual dividend of $0.66 per share and has a dividend yield of 1.9%. LyondellBasell Industries pays out -110.8% of its earnings in the form of a dividend. Mitsubishi Chemical pays out 108.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. LyondellBasell Industries has raised its dividend for 14 consecutive years. LyondellBasell Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

LyondellBasell Industries has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, Mitsubishi Chemical has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Summary

LyondellBasell Industries beats Mitsubishi Chemical on 13 of the 18 factors compared between the two stocks.

About LyondellBasell Industries

LyondellBasell Industries N.V. operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. The company operates in six segments: Olefins and PolyolefinsAmericas; Olefins and PolyolefinsEurope, Asia, International; Intermediates and Derivatives; Advanced Polymer Solutions; Refining; and Technology. It produces and markets olefins and co-products, polyethylene, and polypropylene; and propylene oxide and derivatives; oxyfuels and related products; and intermediate chemicals, such as styrene monomer, acetyls, ethylene oxide, and ethylene glycol. In addition, the company produce and markets compounding and solutions including polypropylene compounds, engineered plastics, masterbatches, engineered composites, colors and powders, and advanced polymers including catalloy and polybutene-1; and refines heavy, high-sulfur crude oil and other crude oils, as well as refined products, including gasoline and distillates. Further, it develops and licenses chemical and polyolefin process technologies; manufactures and sells polyolefin catalysts; and serves food packaging, home furnishings, automotive components, and paints and coatings applications. LyondellBasell Industries N.V. was incorporated in 2009 and is headquartered in Houston, Texas.

About Mitsubishi Chemical

Mitsubishi Chemical Group Corporation provides performance products, chemicals, industrial gases, health care products, and other products in Japan and internationally. It operates in five segments: Specialty Materials, Industrial Gases, Health Care, MMA, and Basic Materials. The Specialty Materials segment offers performance polymers, soarnol, gohsenol, sustainable polymers, and engineering plastics; coating materials, additives, and fines; packaging, industrial and medical, acetyl, and polyester films; engineering shapes and solutions, carbon fiber and composite materials, and fibers; aqua, life, and infrastructure solutions; and semiconductor, electronics, and battery materials. The Industrial Gases segment provides industrial gases. The Health Care segment offers ethical pharmaceuticals. The MMA segment provides methyl methacrylate (MMA) and polymethyl methacrylate (PMMA). The Basic Materials segment offers basic petrochemicals, polyolefins, and basic chemical derivatives, as well as carbon products. The company provides engineering, transportation, and warehousing services. Mitsubishi Chemical Group Corporation was incorporated in 2005 and is headquartered in Tokyo, Japan.