Olin (NYSE:OLN) and LyondellBasell Industries (NYSE:LYB) Critical Contrast

Olin (NYSE:OLN) and LyondellBasell Industries (NYSE:LYB) are both basic materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Institutional & Insider Ownership

88.7% of Olin shares are held by institutional investors. Comparatively, 71.2% of LyondellBasell Industries shares are held by institutional investors. 1.6% of Olin shares are held by company insiders. Comparatively, 0.1% of LyondellBasell Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Olin has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. Comparatively, LyondellBasell Industries has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Dividends

Olin pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. LyondellBasell Industries pays an annual dividend of $2.76 per share and has a dividend yield of 3.7%. Olin pays out -71.4% of its earnings in the form of a dividend. LyondellBasell Industries pays out -110.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. 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.

Profitability

This table compares Olin and LyondellBasell Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Olin	-1.89%	-4.68%	-1.18%
LyondellBasell Industries	-2.68%	5.68%	1.77%

Analyst Recommendations

This is a summary of current recommendations and price targets for Olin and LyondellBasell Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Olin	2	10	3	1	2.19
LyondellBasell Industries	4	9	7	2	2.32

Olin currently has a consensus price target of $27.92, indicating a potential upside of 2.91%. LyondellBasell Industries has a consensus price target of $76.76, indicating a potential upside of 2.34%. Given Olin’s higher possible upside, equities research analysts clearly believe Olin is more favorable than LyondellBasell Industries.

Earnings & Valuation

This table compares Olin and LyondellBasell Industries”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Olin	$6.78 billion	0.46	-$100.50 million	($1.12)	-24.23
LyondellBasell Industries	$30.15 billion	0.80	-$738.00 million	($2.49)	-30.12

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

Summary

LyondellBasell Industries beats Olin on 10 of the 18 factors compared between the two stocks.

About Olin

Olin Corporation manufactures and distributes chemical products in the United States, Europe, Asia Pacific, Latin America, and Canada. It operates through three segments: Chlor Alkali Products and Vinyls; Epoxy; and Winchester. The Chlor Alkali Products and Vinyls segment offers chlorine and caustic soda, ethylene dichloride and vinyl chloride monomers, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, hydrochloric acid, hydrogen, bleach products, potassium hydroxide, and chlorinated organics intermediates and solvents. The Epoxy segment provides Allylics, such as allyl chloride, epichlorohydrin, and glycerin; aromatics, including acetone, bisphenol, cumene, and phenol; liquid and solid epoxy resins; and converted epoxy resins and additives. The Winchester segment offers sporting ammunition products, including shotshells, small caliber centerfire, and rimfire ammunition products for hunters and recreational shooters, and law enforcement agencies; small caliber military ammunition products for use in infantry and mounted weapons; and industrial products comprising gauge loads and powder-actuated tool loads for maintenance applications in power and concrete industries, and powder-actuated tools in construction industry. The company markets its products through its sales force, as well as directly to various industrial customers, mass merchants, retailers, wholesalers, gun clubs, other distributors, and the U.S. Government and its prime contractors. Olin Corporation was incorporated in 1892 and is based in Clayton, Missouri.

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.