Analyzing Huntsman (NYSE:HUN) and Arkema (OTCMKTS:ARKAY)

Huntsman (NYSE:HUN) and Arkema (OTCMKTS:ARKAY) are both materials companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, profitability, earnings, analyst recommendations, institutional ownership, dividends and valuation.

Volatility and Risk

Huntsman has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Arkema has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Huntsman	-2.81%	-3.11%	-1.28%
Arkema	0.91%	4.56%	2.26%

Insider & Institutional Ownership

84.8% of Huntsman shares are owned by institutional investors. 6.8% of Huntsman shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Huntsman and Arkema, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Huntsman	3	10	2	1	2.06
Arkema	1	6	0	0	1.86

Huntsman presently has a consensus price target of $11.62, indicating a potential upside of 19.46%. Given Huntsman’s stronger consensus rating and higher probable upside, equities analysts clearly believe Huntsman is more favorable than Arkema.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Huntsman	$6.16 billion	0.28	-$284.00 million	($1.00)	-9.72
Arkema	$10.26 billion	0.49	$71.28 million	$0.62	105.11

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

Dividends

Huntsman pays an annual dividend of $0.35 per share and has a dividend yield of 3.6%. Arkema pays an annual dividend of $3.12 per share and has a dividend yield of 4.8%. Huntsman pays out -35.0% of its earnings in the form of a dividend. 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. Huntsman has increased its dividend for 4 consecutive years.

Summary

Arkema beats Huntsman on 10 of the 18 factors compared between the two stocks.

About Huntsman

Huntsman Corporation is a global chemicals manufacturer that produces differentiated and specialty chemical products for industrial and consumer markets. Its products include polyurethane chemicals, epoxy and other advanced materials, and performance chemicals used in applications such as insulation, coatings, adhesives, construction, transportation, textiles, and electronics. Founded by Jon Huntsman Sr. in 1970, the company began as a plastics and packaging business before expanding into chemicals.

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.