Shin-Etsu Chemical (OTCMKTS:SHECY – Get Free Report) and Avient (NYSE:AVNT – Get Free Report) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Profitability
This table compares Shin-Etsu Chemical and Avient’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Shin-Etsu Chemical | 19.94% | 10.90% | 9.31% |
| Avient | 3.65% | 10.57% | 4.17% |
Analyst Recommendations
This is a summary of recent recommendations for Shin-Etsu Chemical and Avient, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Shin-Etsu Chemical | 1 | 0 | 0 | 0 | 1.00 |
| Avient | 0 | 3 | 4 | 1 | 2.75 |
Dividends
Shin-Etsu Chemical pays an annual dividend of $0.25 per share and has a dividend yield of 1.6%. Avient pays an annual dividend of $1.08 per share and has a dividend yield of 3.3%. Shin-Etsu Chemical pays out 28.4% of its earnings in the form of a dividend. Avient pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Avient has increased its dividend for 1 consecutive years. Avient is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk & Volatility
Shin-Etsu Chemical has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Avient has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500.
Earnings & Valuation
This table compares Shin-Etsu Chemical and Avient”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Shin-Etsu Chemical | $16.82 billion | 3.71 | $3.56 billion | $0.88 | 17.85 |
| Avient | $3.24 billion | 0.92 | $169.50 million | $1.28 | 25.42 |
Shin-Etsu Chemical has higher revenue and earnings than Avient. Shin-Etsu Chemical is trading at a lower price-to-earnings ratio than Avient, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
0.0% of Shin-Etsu Chemical shares are owned by institutional investors. Comparatively, 95.5% of Avient shares are owned by institutional investors. 0.9% of Avient shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Summary
Avient beats Shin-Etsu Chemical on 11 of the 18 factors compared between the two stocks.
About Shin-Etsu Chemical
Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.
About Avient
Avient Corporation operates as a formulator of material solutions in the United States, Canada, Mexico, Europe, South America, and Asia. It operates in two segments, Color, Additives and Inks; and Specialty Engineered Materials. The Color, Additives and Inks segment offers custom color and additive concentrates in solid and liquid form for thermoplastics, dispersions for thermosets, and specialty inks; custom-formulated liquid system, such as polyester, vinyl, natural rubber and latex, polyurethane, and silicone; and proprietary inks. Its products are used in medical and pharmaceutical devices, food packaging, personal care and cosmetics, transportation, building products, wire and cable, recreational and athletic apparel, construction and filtration, outdoor furniture, healthcare, textiles and appliances, and industrial markets. The Specialty Engineered Materials segment provides specialty polymer formulations, services, and solutions for designers, assemblers, and processors of thermoplastic materials. It sells its products through direct sales personnel, distributors, and commissioned sales agents. The company was formerly known as PolyOne Corporation and changed its name to Avient Corporation in June 2020. Avient Corporation was founded in 1885 and is headquartered in Avon Lake, Ohio.
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