Analyzing Arkema (ARKAY) and Its Peers

Arkema (OTCMKTS:ARKAY) is one of 295 publicly-traded companies in the “Chemicals” industry, but how does it weigh in compared to its peers? We will compare Arkema to similar businesses based on the strength of its earnings, risk, analyst recommendations, valuation, institutional ownership, profitability and dividends.

Institutional and Insider Ownership

47.4% of shares of all “Chemicals” companies are held by institutional investors. 13.7% of shares of all “Chemicals” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Arkema has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, Arkema’s peers have a beta of 0.93, suggesting that their average stock price is 7% less volatile than the S&P 500.

Earnings & Valuation

This table compares Arkema and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Arkema	$10.26 billion	$71.28 million	220.99
Arkema Competitors	$6.40 billion	$222.31 million	6.89

Arkema has higher revenue, but lower earnings than its peers. Arkema is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Dividends

Arkema pays an annual dividend of $3.12 per share and has a dividend yield of 4.9%. Arkema pays out 1,075.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Chemicals” companies pay a dividend yield of 3.1% and pay out 104.9% of their earnings in the form of a dividend.

Profitability

This table compares Arkema and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arkema	0.91%	4.56%	2.26%
Arkema Competitors	-59.14%	-0.41%	-1.37%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Arkema and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arkema	1	6	0	0	1.86
Arkema Competitors	3248	12212	14131	519	2.40

As a group, “Chemicals” companies have a potential upside of 8.90%. Given Arkema’s peers stronger consensus rating and higher probable upside, analysts clearly believe Arkema has less favorable growth aspects than its peers.

Summary

Arkema peers beat Arkema on 9 of the 15 factors compared.

Arkema Company Profile

Arkema S.A. manufactures and sells specialty chemicals and advanced materials worldwide. The company operates in three segments: Adhesive Solutions, Advanced Materials and Coating Solutions, and Intermediates. The Adhesive Solutions segment provides solutions for construction, renovation of buildings, DIY, durable goods, and packaging and non-woven applications; and supplies technologies used in building activities for businesses and individuals, including sealants, tiles, flooring adhesives and waterproofing systems, and technologies used in industry, which include automotive, textiles, glazing, flexible and rigid packaging, and hygiene markets. This segment also offers performance polymers, such as specialty polyamides, PVDF, polyimides, fluorospecialties, and polyetherketoneketone; and performance additives which includes molecular sieves, organic peroxides, thiochemicals, and hydrogen peroxide. The Advance Materials and Coating Solutions segment offers coating solutions, including comprising EU/US acrylics and coating resins; coating additives, such as sartomer photocure resins and coatex rheology additives. This segment also provides decorative paints, industrial coatings, and adhesives; and solutions for applications in the paper, superabsorbent, water treatment and oil and gas extraction, and 3D printing and electronics industries. The Intermediates segment provides fluorogases and acrylics; and industrial intermediate chemicals used in construction, refrigeration and air conditioning, automotive, coatings, and water treatment sectors. Arkema S.A. was incorporated in 2003 and is headquartered in Colombes, France.