Methanex (NASDAQ:MEOH) versus Arkema (OTCMKTS:ARKAY) Critical Comparison

Arkema (OTCMKTS:ARKAY) and Methanex (NASDAQ:MEOH) 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 risk, profitability, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

73.5% of Methanex shares are held by institutional investors. 1.0% of Methanex shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arkema	2.41%	6.36%	3.31%
Methanex	5.97%	9.30%	3.47%

Dividends

Arkema pays an annual dividend of $3.02 per share and has a dividend yield of 5.3%. Methanex pays an annual dividend of $0.74 per share and has a dividend yield of 2.1%. Arkema pays out 145.2% 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 increased its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Arkema and Methanex, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arkema	2	1	2	0	2.00
Methanex	1	2	9	2	2.86

Methanex has a consensus target price of $46.55, indicating a potential upside of 30.34%. Given Methanex’s stronger consensus rating and higher possible upside, analysts clearly believe Methanex is more favorable than Arkema.

Earnings and Valuation

This table compares Arkema and Methanex”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arkema	$10.33 billion	0.42	$383.06 million	$2.08	27.64
Methanex	$3.57 billion	0.77	$163.99 million	$2.95	12.11

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

Volatility & Risk

Arkema has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Methanex has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Summary

Methanex beats Arkema on 13 of the 17 factors compared between the two stocks.

About Arkema

Arkema S.A. manufactures and sells specialty chemicals and advanced materials worldwide. The company operates in three segments: Adhesive Solutions, Advanced Materials and Coating Solutions, and Intermediates. The Adhesive Solutions segment provides solutions for construction, renovation of buildings, DIY, durable goods, and packaging and non-woven applications; and supplies technologies used in building activities for businesses and individuals, including sealants, tiles, flooring adhesives and waterproofing systems, and technologies used in industry, which include automotive, textiles, glazing, flexible and rigid packaging, and hygiene markets. This segment also offers performance polymers, such as specialty polyamides, PVDF, polyimides, fluorospecialties, and polyetherketoneketone; and performance additives which includes molecular sieves, organic peroxides, thiochemicals, and hydrogen peroxide. The Advance Materials and Coating Solutions segment offers coating solutions, including comprising EU/US acrylics and coating resins; coating additives, such as sartomer photocure resins and coatex rheology additives. This segment also provides decorative paints, industrial coatings, and adhesives; and solutions for applications in the paper, superabsorbent, water treatment and oil and gas extraction, and 3D printing and electronics industries. The Intermediates segment provides fluorogases and acrylics; and industrial intermediate chemicals used in construction, refrigeration and air conditioning, automotive, coatings, and water treatment sectors. Arkema S.A. was incorporated in 2003 and is headquartered in Colombes, France.

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.