Financial Contrast: Mitsubishi Chemical (OTCMKTS:MTLHY) & Valhi (NYSE:VHI)

Mitsubishi Chemical (OTCMKTS:MTLHY) and Valhi (NYSE:VHI) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, dividends, profitability and risk.

Earnings & Valuation

This table compares Mitsubishi Chemical and Valhi”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Mitsubishi Chemical	$24.61 billion	0.41	$439.53 million	$0.61	57.70
Valhi	$2.08 billion	0.19	-$57.60 million	($2.54)	-5.51

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Mitsubishi Chemical and Valhi, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mitsubishi Chemical	0	0	0	0	0.00
Valhi	1	0	0	0	1.00

Risk & Volatility

Mitsubishi Chemical has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Valhi has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Insider and Institutional Ownership

3.8% of Valhi shares are owned by institutional investors. 0.2% of Valhi shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Mitsubishi Chemical	N/A	N/A	N/A
Valhi	-3.45%	-4.29%	-2.23%

Dividends

Mitsubishi Chemical pays an annual dividend of $0.66 per share and has a dividend yield of 1.9%. Valhi pays an annual dividend of $0.32 per share and has a dividend yield of 2.3%. 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. Valhi pays out -12.6% of its earnings in the form of a dividend. Valhi is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Mitsubishi Chemical beats Valhi on 8 of the 14 factors compared between the two stocks.

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.

About Valhi

Valhi, Inc. engages in the chemicals, component products, and real estate management and development businesses in Europe, North America, the Asia Pacific, and internationally. The company’s Chemicals segment produces and markets titanium dioxide pigments (TiO2), which are white inorganic pigments used in various applications by paint, plastics, decorative laminate, and paper manufacturers. It offers TiO2 under the KRONOS name through agents and distributors. The company’s Component Products segment manufactures mechanical and electrical cabinet locks, and other locking mechanisms for use in ignition systems, mailboxes, file cabinets, desk drawers, tool storage cabinets, vending and cash containment machines, integrated inventory and access control secured narcotics boxes, medical cabinetry security, electronic circuit panels, storage compartments, and gas station security applications. It also provides stainless steel exhaust components, gauges, throttle controls, wake enhancement systems, trim tabs, and related hardware and accessories primarily for performance and ski/wakeboard boats. The company’s Real Estate Management and Development segment offers utility services to industrial and municipal customers; owns real properties; and develops land holdings for commercial, industrial, and residential purposes. It also holds marketable securities and other investments. The company was incorporated in 1932 and is based in Dallas, Texas. Valhi, Inc. is a subsidiary of Dixie Rice Agricultural L.L.C.