Analyzing Covestro (COVTY) and Its Rivals

Covestro (OTCMKTS:COVTY) is one of 298 publicly-traded companies in the “Chemicals” industry, but how does it contrast to its peers? We will compare Covestro to related companies based on the strength of its analyst recommendations, valuation, risk, profitability, institutional ownership, earnings and dividends.

Risk and Volatility

Covestro has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Covestro’s peers have a beta of 1.24, meaning that their average share price is 24% more volatile than the S&P 500.

Valuation & Earnings

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

	Gross Revenue	Net Income	Price/Earnings Ratio
Covestro	$14.64 billion	-$728.62 million	-13.66
Covestro Competitors	$6.27 billion	$217.41 million	-11.03

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Covestro	-6.97%	-13.22%	-6.31%
Covestro Competitors	-119.58%	-12.63%	-2.20%

Insider & Institutional Ownership

47.0% of shares of all “Chemicals” companies are owned by institutional investors. 14.0% of shares of all “Chemicals” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and price targets for Covestro and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Covestro	0	1	0	0	2.00
Covestro Competitors	3102	11890	13906	490	2.40

As a group, “Chemicals” companies have a potential upside of 8.96%. Given Covestro’s peers stronger consensus rating and higher possible upside, analysts plainly believe Covestro has less favorable growth aspects than its peers.

Summary

Covestro peers beat Covestro on 11 of the 13 factors compared.

Covestro Company Profile

Covestro AG supplies high-tech polymer materials and application solutions. It operates in two segments, Performance Materials, and Solutions & Specialties. The Performance Materials segment develops, produces, and supplies high-performance materials, such as polyurethanes and polycarbonates, and base chemicals, which include diphenylmethane diisocyanate (MDI), toluylene diisocyanate, long-chain polyols, and polycarbonate resins for use in furniture and wood processing, construction, automotive, and transportation industries, as well as roof structures, insulation for buildings and refrigerators, mattresses, car seats, and other applications. The Solutions & Specialties segment comprises a range of polymer products, including polycarbonates, precursors for coatings and adhesives, MDI specialties and polyols, thermoplastic polyurethanes, specialty films, and elastomers that are used in automotive and transportation, electrical, electronics and household appliances, construction, and healthcare industries, as well as composite resins for solar panel frames, laptops, floodlights, and electric vehicle batteries. The company markets its products through trading houses and distributors. It operates in Europe, the Middle East, Africa, Latin America, the United States, Canada, and the People's Republic of China. The company was founded in 1863 and is headquartered in Leverkusen, Germany.