Contrasting Resonac (OTCMKTS:SHWDY) & Methanex (NASDAQ:MEOH)

Resonac (OTCMKTS:SHWDY) and Methanex (NASDAQ:MEOH) are both mid-cap basic materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitability, earnings, analyst recommendations and risk.

Risk and Volatility

Resonac has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, Methanex has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Earnings and Valuation

This table compares Resonac and Methanex”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Resonac	$8.78 billion	0.74	$350.37 million	$0.20	175.75
Methanex	$3.57 billion	0.81	$163.99 million	$2.95	12.63

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

Dividends

Resonac pays an annual dividend of $0.29 per share and has a dividend yield of 0.8%. Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 2.0%. Resonac pays out 145.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Methanex pays out 25.1% of its earnings in the form of a dividend. Methanex has raised its dividend for 4 consecutive years. Methanex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Resonac and Methanex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Resonac	0.43%	3.98%	1.27%
Methanex	5.97%	9.30%	3.47%

Institutional and Insider Ownership

73.5% of Methanex shares are held by institutional investors. 1.0% of Methanex shares are held 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.

Analyst Ratings

This is a breakdown of current recommendations for Resonac and Methanex, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Resonac	0	0	0	1	4.00
Methanex	1	2	9	2	2.86

Methanex has a consensus target price of $46.55, indicating a potential upside of 24.92%. Given Methanex’s higher probable upside, analysts plainly believe Methanex is more favorable than Resonac.

Summary

Methanex beats Resonac on 14 of the 18 factors compared between the two stocks.

About Resonac

Resonac Holdings Corporation operates as a chemical company in Japan, China, rest of Asia, and internationally. It operates through Semiconductor and Electronic Materials, Mobility, Innovation Enabling Materials, and Chemicals segments. The company offers gases and solvents, abatement systems and surface treatments, CMP slurries, and anti-charging materials; semiconductor-related materials, display and sensor-related materials, and films; base and photosensitive materials for PWBs; hard disks, SiCs, and optical semiconductors for use as electronic device components; and molded plastics/sheet-formed, powder metal, and aluminum products for automotives. It also provides lithium-ion batteries and mechanical carbon; ceramics, resins, cosmetic ingredients/medicinal additives, monomers, adhesives, tapes, and chromatography products; and elastomers. In addition, the company offers polyimides; HD media; friction materials; aluminum gravity casting products; packaging/containers for food, medicine, and electronics; electrical insulating epoxy resin molded products; zipper bags and tapes; titanium oxide and alumina; and elastic polishing grindstone. Further, it provides polypropylene and polyethylene; liquefied carbon dioxide, dry ice, and gas-related equipment; liquefied oxygen, nitrogen, and argon; molecular sieve; graphite electrodes; plasters, fireproofing pipes, and wall sidings; cement and moisture removal sheets; industrial materials; and FRP, coated sand, and separating mediums. Additionally, the company engages in the contract development and manufacturing of regenerative medicines; leasing of personal computers and other business equipment; outsourcing of salary, welfare, and finance-related business; and synthesis, analysis, and SDS preparation services. The company was formerly known as Showa Denko K.K. and changed its name to Resonac Holdings Corporation in January 2023. Resonac Holdings Corporation was incorporated in 1939 and is headquartered in Tokyo, Japan.

About Methanex

Methanex Corporation produces and supplies methanol in China, Europe, the United States, South America, South Korea, Canada, and Asia. The company also purchases methanol produced by others under methanol offtake contracts and on the spot market. In addition, it owns and leases storage and terminal facilities. The company owns and manages a fleet of approximately 30 ocean-going vessels. It serves chemical and petrochemical producers. Methanex Corporation was incorporated in 1968 and is headquartered in Vancouver, Canada.