Financial Review: Mitsubishi Chemical (OTCMKTS:MTLHY) & Eastman Chemical (NYSE:EMN)

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

Volatility and Risk

Mitsubishi Chemical has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Eastman Chemical has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Dividends

Mitsubishi Chemical pays an annual dividend of $0.66 per share and has a dividend yield of 1.9%. Eastman Chemical pays an annual dividend of $3.36 per share and has a dividend yield of 5.0%. 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. Eastman Chemical pays out 97.4% 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 has increased 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.

Valuation & Earnings

This table compares Mitsubishi Chemical and Eastman Chemical”s revenue, earnings per share (EPS) 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
Eastman Chemical	$8.75 billion	0.88	$474.00 million	$3.45	19.58

Eastman Chemical has lower revenue, but higher earnings than Mitsubishi Chemical. Eastman Chemical 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 summary of current ratings for Mitsubishi Chemical and Eastman Chemical, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Mitsubishi Chemical	0	0	0	0	0.00
Eastman Chemical	0	7	7	0	2.50

Eastman Chemical has a consensus target price of $79.67, suggesting a potential upside of 17.93%. Given Eastman Chemical’s stronger consensus rating and higher possible upside, analysts clearly believe Eastman Chemical is more favorable than Mitsubishi Chemical.

Insider and Institutional Ownership

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

Profitability

This table compares Mitsubishi Chemical and Eastman Chemical’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
Eastman Chemical	4.62%	8.88%	3.52%

Summary

Eastman Chemical beats Mitsubishi Chemical on 15 of the 17 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 Eastman Chemical

Eastman Chemical Company operates as a specialty materials company in the United States, China, and internationally. The company's Additives & Functional Products segment offers amine derivative-based building blocks, intermediates for surfactants, metam-based soil fumigants, and organic acid-based solutions; specialty coalescent and solvents, paint additives, and specialty polymers; and heat transfer and aviation fluids. It serves transportation, personal care, wellness, food, feed, agriculture, building and construction, water treatment, energy, consumables, durables, and electronics markets. Its Advanced Materials segment provides copolyesters, cellulosic biopolymers, cellulose esters, polyvinyl butyral sheets, and window and protective films for value-added end uses in the transportation, durables, electronics, building and construction, medical and pharma, and consumables markets. The company's Chemical Intermediates segment offers olefin and acetyl derivatives, ethylene, and commodity solvents; and primary non-phthalate and phthalate plasticizers, and niche non-phthalate plasticizers for industrial chemicals and processing, building and construction, health and wellness, and food and feed. Its Fibers segment provides cellulose acetate tow, triacetin, cellulose acetate flake, acetic acid, and acetic anhydride for use in filtration media primarily cigarette filters; natural and solution dyed acetate yarns, and staple fiber for use in consumables, and health and wellness markets; and wet-laid nonwoven media, specialty and engineered papers, and cellulose acetate fibers for transportation, industrial, agriculture and mining, and aerospace markets. The company was founded in 1920 and is headquartered in Kingsport, Tennessee.