Huntsman (NYSE:HUN) vs. Albemarle (NYSE:ALB) Critical Analysis

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Huntsman	4	7	2	0	1.85
Albemarle	5	16	6	1	2.11

Huntsman currently has a consensus price target of $10.00, indicating a potential upside of 20.64%. Albemarle has a consensus price target of $100.21, indicating a potential downside of 17.54%. Given Huntsman’s higher possible upside, research analysts clearly believe Huntsman is more favorable than Albemarle.

Dividends

Huntsman pays an annual dividend of $0.35 per share and has a dividend yield of 4.2%. Albemarle pays an annual dividend of $1.62 per share and has a dividend yield of 1.3%. Huntsman pays out -18.4% of its earnings in the form of a dividend. Albemarle pays out -101.9% 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. Huntsman has raised its dividend for 4 consecutive years and Albemarle has raised its dividend for 30 consecutive years.

Institutional & Insider Ownership

84.8% of Huntsman shares are held by institutional investors. Comparatively, 92.9% of Albemarle shares are held by institutional investors. 5.6% of Huntsman shares are held by insiders. Comparatively, 0.3% of Albemarle shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Huntsman and Albemarle”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Huntsman	$5.78 billion	0.25	-$189.00 million	($1.90)	-4.36
Albemarle	$4.95 billion	2.89	-$1.18 billion	($1.59)	-76.43

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

Volatility & Risk

Huntsman has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, Albemarle has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Huntsman	-5.75%	-2.48%	-1.10%
Albemarle	-18.61%	-1.87%	-0.89%

Summary

Albemarle beats Huntsman on 11 of the 18 factors compared between the two stocks.

About Huntsman

Huntsman Corporation manufactures and sells diversified organic chemical products worldwide. The company operates in three segments: Polyurethanes, Performance Products, and Advanced Materials. The Polyurethanes segment offers polyurethane chemicals, including methyl diphenyl diisocyanate, polyether and polyester polyols, and thermoplastic polyurethane; and aniline, benzene, nitrobenzene and other co-products. The Performance Products segment manufactures amines, such as polyetheramines, ethyleneamines, DGA Agent, JEFFCAT catalysts, and E-GRADE specialty amines and carbonates; and maleic anhydrides. The Advanced Materials segment offers epoxy, phenoxy, acrylic, polyurethane, and acrylonitrile-butadiene-based polymer formulations; and thermoset resins, curing and toughening agents, and carbon nanomaterials. The company provides pre-and post-sales technical service support to customers. Its products are used in a range of applications, including adhesives, aerospace, automotive, construction products, durable and non-durable consumer products, electronics, insulation, packaging, coatings and construction, power generation, and refining, as well as serves the elastomers, insulation, footwear, furniture, industrial, oil and gas, liquid natural gas transport, printed circuit boards, consumer, appliances, electrical power transmission and distribution, recreational sports equipment, and medical appliances markets. The company sells its products through a network of distributors and agents. Huntsman Corporation was founded in 1970 and is headquartered in The Woodlands, Texas.

About Albemarle

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments: Energy Storage, Specialties and Ketjen. The Energy Storage segment offers lithium compounds, including lithium carbonate, lithium hydroxide, and lithium chloride; technical services for the handling and use of reactive lithium products; and lithium-containing by-products recycling services. The Specialties segment provides bromine-based specialty chemicals, including elemental bromine, alkyl and inorganic bromides, brominated powdered activated carbon, and other bromine fine chemicals; lithium specialties, such as butyllithium and lithium aluminum hydride; develops and manufactures cesium products for the chemical and pharmaceutical industries; and zirconium, barium, and titanium products for pyrotechnical applications that include airbag initiators. The Ketjen segment offers clean fuels technologies (CFT), which is composed of hydroprocessing catalysts (HPC) together with isomerization and akylation catalysts; fluidized catalytic cracking (FCC) catalysts and additives; and performance catalyst solutions (PCS), which is composed of organometallics and curatives. The company serves the energy storage, petroleum refining, consumer electronics, construction, automotive, lubricants, pharmaceuticals, and crop protection markets. Albemarle Corporation was founded in 1887 and is headquartered in Charlotte, North Carolina.