Critical Analysis: Albemarle (ALB) vs. Its Peers

Albemarle (NYSE:ALB) is one of 295 public companies in the “Chemicals” industry, but how does it weigh in compared to its competitors? We will compare Albemarle to similar companies based on the strength of its analyst recommendations, risk, profitability, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares Albemarle and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Albemarle	10.40%	15.23%	7.62%
Albemarle Competitors	-59.66%	0.26%	-1.43%

Volatility and Risk

Albemarle has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, Albemarle’s competitors have a beta of 1.09, suggesting that their average stock price is 9% more volatile than the S&P 500.

Dividends

Albemarle pays an annual dividend of $1.64 per share and has a dividend yield of 1.7%. Albemarle pays out 39.6% of its earnings in the form of a dividend. As a group, “Chemicals” companies pay a dividend yield of 3.1% and pay out 102.8% of their earnings in the form of a dividend. Albemarle has raised its dividend for 30 consecutive years.

Valuation & Earnings

This table compares Albemarle and its competitors revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Albemarle	$5.91 billion	-$510.63 million	23.89
Albemarle Competitors	$8.01 billion	$222.31 million	-0.77

Albemarle’s competitors have higher revenue and earnings than Albemarle. Albemarle is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Insider and Institutional Ownership

92.9% of Albemarle shares are owned by institutional investors. Comparatively, 47.5% of shares of all “Chemicals” companies are owned by institutional investors. 0.4% of Albemarle shares are owned by insiders. Comparatively, 13.7% of shares of all “Chemicals” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Albemarle and its competitors, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Albemarle	3	7	15	0	2.48
Albemarle Competitors	3245	12203	14127	516	2.40

Albemarle currently has a consensus target price of $177.64, indicating a potential upside of 79.62%. As a group, “Chemicals” companies have a potential upside of 8.13%. Given Albemarle’s stronger consensus rating and higher probable upside, analysts plainly believe Albemarle is more favorable than its competitors.

Summary

Albemarle beats its competitors on 10 of the 15 factors compared.

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.