Critical Comparison: Albemarle (NYSE:ALB) vs. Lsb Industries (NYSE:LXU)

Albemarle (NYSE:ALB) and Lsb Industries (NYSE:LXU) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, analyst recommendations, risk, valuation, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for Albemarle and Lsb Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Albemarle	1	11	14	1	2.56
Lsb Industries	0	5	0	0	2.00

Albemarle currently has a consensus target price of $203.04, indicating a potential upside of 37.74%. Lsb Industries has a consensus target price of $15.33, indicating a potential upside of 29.35%. Given Albemarle’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Albemarle is more favorable than Lsb Industries.

Profitability

This table compares Albemarle and Lsb Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Albemarle	-5.00%	5.22%	2.51%
Lsb Industries	7.16%	8.91%	3.96%

Risk & Volatility

Albemarle has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500. Comparatively, Lsb Industries has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500.

Insider & Institutional Ownership

92.9% of Albemarle shares are owned by institutional investors. Comparatively, 73.7% of Lsb Industries shares are owned by institutional investors. 0.4% of Albemarle shares are owned by company insiders. Comparatively, 3.0% of Lsb Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Albemarle and Lsb Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Albemarle	$5.14 billion	3.38	-$510.63 million	($3.41)	-43.23
Lsb Industries	$615.21 million	1.39	$24.61 million	$0.63	18.82

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

Summary

Albemarle beats Lsb Industries on 8 of the 15 factors compared between the two stocks.

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.

About Lsb Industries

LSB Industries, Inc. engages in the manufacture, marketing, and sale of chemical products. The company provides nitrogen-based fertilizers, such as ammonia, fertilizer grade high density ammonium nitrate (HDAN), and urea ammonia nitrate for fertilizer for corn, pastures, and other crops, as well as nitrogen, phosphorus, and potassium (NPK) fertilizer blends application. It also offers high purity and commercial grade ammonia, high purity ammonium nitrate, sulfuric acids, mixed nitrating acids, carbon dioxide, and diesel exhaust fluids, as well as concentrated, and blended and regular nitric acids for various applications, including semiconductor, nylon, and polyurethane intermediates, ammonium nitrate, and metal processing; chemical feedstocks, emissions abatement, water treatments, and refrigerants; pulp and paper, aluminum, water treatment, metals, and vanadium processing; abatement for diesel vehicles; and food refrigeration, dry ice, and enhanced oil recovery. In addition, the company provides industrial grade and low density ammonium nitrate, and ammonium nitrate for explosives mining, quarries, and other blasting activities. It sells its products through distributors, as well as directly to end customers in the United States and other parts of North America. The company serves to the agricultural, industrial, and mining markets. LSB Industries, Inc. was incorporated in 1968 and is headquartered in Oklahoma City, Oklahoma.