Comparing Celanese (NYSE:CE) & Balchem (NASDAQ:BCPC)

Balchem (NASDAQ:BCPC) and Celanese (NYSE:CE) are both mid-cap basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Profitability

This table compares Balchem and Celanese’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Balchem	14.16%	12.01%	8.77%
Celanese	-16.54%	11.28%	3.06%

Valuation and Earnings

This table compares Balchem and Celanese”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Balchem	$953.68 million	5.15	$128.48 million	$4.17	36.12
Celanese	$10.28 billion	0.62	-$1.52 billion	($15.22)	-3.80

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

Analyst Ratings

This is a summary of recent ratings and target prices for Balchem and Celanese, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Balchem	0	1	1	0	2.50
Celanese	1	10	6	0	2.29

Balchem currently has a consensus target price of $180.00, indicating a potential upside of 19.49%. Celanese has a consensus target price of $66.50, indicating a potential upside of 14.85%. Given Balchem’s stronger consensus rating and higher possible upside, research analysts plainly believe Balchem is more favorable than Celanese.

Institutional & Insider Ownership

87.9% of Balchem shares are held by institutional investors. Comparatively, 98.9% of Celanese shares are held by institutional investors. 1.3% of Balchem shares are held by insiders. Comparatively, 0.3% of Celanese shares are held by 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.

Risk & Volatility

Balchem has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Celanese has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Dividends

Balchem pays an annual dividend of $0.87 per share and has a dividend yield of 0.6%. Celanese pays an annual dividend of $0.12 per share and has a dividend yield of 0.2%. Balchem pays out 20.9% of its earnings in the form of a dividend. Celanese pays out -0.8% 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. Balchem has increased its dividend for 16 consecutive years. Balchem is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Balchem beats Celanese on 12 of the 17 factors compared between the two stocks.

About Balchem

Balchem Corporation develops, manufactures, and markets specialty performance ingredients and products for the nutritional, food, pharmaceutical, animal health, medical device sterilization, plant nutrition, and industrial markets worldwide. It operates through three segments: Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products. The Human Nutrition & Health segment supplies ingredients in the food and beverage industry. Its products include spray dried and emulsified powders, extrusion and agglomeration, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, and cereal systems, as well as ice cream bases and variegates. This segment also offers specialty vitamin K2; microencapsulation solutions for various applications; and human grade choline nutrients and mineral amino acid chelated products for nutrition and health applications. The Animal Nutrition & Health segment provides microencapsulated products to enhance health and milk production, and delivering nutrient supplements in ruminant animals; chelation technology, which offers enhanced nutrient absorption for various species of production and companion animals; methylsulfonylmethane; and choline chloride, a nutrient for monogastric animal health. The Specialty Products segment distributes ethylene oxide and ammonia primarily for use in the health care industry; and single use canisters for sterilizing re-usable devices. This segment also markets and sells propylene oxide, a fumigant to aid in the control of insects and microbiological spoilage, as well as to reduce bacterial and mold contamination in shell and processed nut meats, processed spices, cacao beans, cocoa powder, raisins, figs, and prunes; and chelated minerals for high value crops. It sells its products through sales force, independent distributors, and sales agents. The company was incorporated in 1967 and is headquartered in Montvale, New Jersey.

About Celanese

Celanese Corporation, a chemical and specialty materials company, manufactures and sells high performance engineered polymers in the United States and internationally. It operates through Engineered Materials and Acetyl Chain. The Engineered Materials segment develops, produces, and supplies specialty polymers for automotive and medical applications, as well as for use in industrial products and consumer electronics. The Acetyl Chain segment produces and supplies acetyl products, including acetic acid, vinyl acetate monomers, acetic anhydride, and acetate esters that are used as starting materials for colorants, paints, adhesives, coatings, and pharmaceuticals; and organic solvents and intermediates for pharmaceutical, agricultural, and chemical products. It also offers vinyl acetate-based emulsions for use in paints and coatings, adhesives, construction, glass fiber, textiles, and paper applications; and ethylene vinyl acetate resins and compounds, as well as low-density polyethylene for use in flexible packaging films, lamination film products, hot melt adhesives, automotive parts, and carpeting applications. In addition, it provides redispersible powders (RDP) for use in construction applications, including flooring, plasters, insulation, tiling, and waterproofing. Celanese Corporation was founded in 1918 and is headquartered in Irving, Texas.