Financial Contrast: Celanese (NYSE:CE) and Quaker Houghton (NYSE:KWR)

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

Insider & Institutional Ownership

98.9% of Celanese shares are held by institutional investors. Comparatively, 77.5% of Quaker Houghton shares are held by institutional investors. 0.3% of Celanese shares are held by insiders. Comparatively, 1.1% of Quaker Houghton shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Celanese and Quaker Houghton, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Celanese	3	11	6	0	2.15
Quaker Houghton	1	2	3	0	2.33

Celanese currently has a consensus target price of $53.24, indicating a potential upside of 13.11%. Quaker Houghton has a consensus target price of $152.33, indicating a potential downside of 3.55%. Given Celanese’s higher probable upside, equities research analysts plainly believe Celanese is more favorable than Quaker Houghton.

Dividends

Celanese pays an annual dividend of $0.12 per share and has a dividend yield of 0.3%. Quaker Houghton pays an annual dividend of $2.03 per share and has a dividend yield of 1.3%. Celanese pays out -0.4% of its earnings in the form of a dividend. Quaker Houghton pays out -414.3% 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. Quaker Houghton has raised its dividend for 17 consecutive years. Quaker Houghton is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Celanese	-31.85%	9.87%	2.29%
Quaker Houghton	-0.48%	8.64%	4.31%

Volatility & Risk

Celanese has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, Quaker Houghton has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.

Valuation and Earnings

This table compares Celanese and Quaker Houghton”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Celanese	$10.28 billion	0.50	-$1.52 billion	($28.27)	-1.66
Quaker Houghton	$1.86 billion	1.47	$116.64 million	($0.49)	-322.32

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

Summary

Quaker Houghton beats Celanese on 11 of the 17 factors compared between the two stocks.

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.

About Quaker Houghton

Quaker Chemical Corporation, together with its subsidiaries, develops, produces, and markets various formulated specialty chemical products for a range of heavy industrial and manufacturing applications in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It offers metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die-cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids, and surface treatment chemicals. The company also provides chemical management services. It serves steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies. The company was founded in 1918 and is headquartered in Conshohocken, Pennsylvania.