Comparing Arkema (OTCMKTS:ARKAY) and Eastman Chemical (NYSE:EMN)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arkema	0.91%	4.56%	2.26%
Eastman Chemical	7.15%	10.59%	4.28%

Risk and Volatility

Arkema has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Eastman Chemical has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Arkema and Eastman Chemical, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arkema	1	6	0	0	1.86
Eastman Chemical	1	8	6	0	2.33

Eastman Chemical has a consensus target price of $74.79, indicating a potential upside of 12.42%. Given Eastman Chemical’s stronger consensus rating and higher possible upside, analysts plainly believe Eastman Chemical is more favorable than Arkema.

Dividends

Arkema pays an annual dividend of $3.12 per share and has a dividend yield of 4.8%. Eastman Chemical pays an annual dividend of $3.36 per share and has a dividend yield of 5.1%. Arkema pays out 503.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eastman Chemical pays out 59.7% of its earnings in the form of a dividend. Eastman Chemical has raised its dividend for 15 consecutive years. Eastman Chemical is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

83.7% of Eastman Chemical shares are held by institutional investors. 2.6% of Eastman Chemical shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Arkema and Eastman Chemical”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arkema	$10.26 billion	0.49	$71.28 million	$0.62	104.77
Eastman Chemical	$8.75 billion	0.87	$474.00 million	$5.63	11.82

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

Summary

Eastman Chemical beats Arkema on 15 of the 17 factors compared between the two stocks.

About Arkema

Arkema is a France-based specialty materials and chemicals company serving customers in markets such as construction, transportation, electronics, packaging and consumer goods. The company develops and manufactures specialty adhesives, high-performance materials and coating solutions, alongside selected intermediates used in industrial applications. Its products include advanced polymers, specialty resins and additives, and adhesive technologies. Arkema sells to customers across a broad range of industries and operates internationally, with a presence in Europe, the Americas and Asia.

About Eastman Chemical

Eastman Chemical Company is a global specialty materials and chemicals company founded in 1920 in Kingsport, Tennessee. Originally part of Eastman Kodak, it became an independent company in 1994. Eastman develops and manufactures materials and chemical products for customers in a wide range of industries. Its products include specialty plastics and films, performance additives, chemical intermediates, and cellulose acetate fibers. These materials are used in applications such as transportation, building and construction, consumer goods, electronics, packaging, and healthcare.