Sumitomo Chemcl (OTCMKTS:SOMMY) & Avient (NYSE:AVNT) Critical Review

Avient (NYSE:AVNT) and Sumitomo Chemcl (OTCMKTS:SOMMY) are both mid-cap basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Avient and Sumitomo Chemcl, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avient	1	4	4	1	2.50
Sumitomo Chemcl	0	1	0	0	2.00

Avient currently has a consensus target price of $42.50, indicating a potential upside of 40.03%. Given Avient’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Avient is more favorable than Sumitomo Chemcl.

Volatility & Risk

Avient has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, Sumitomo Chemcl has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500.

Profitability

This table compares Avient and Sumitomo Chemcl’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avient	3.65%	10.57%	4.17%
Sumitomo Chemcl	0.35%	0.80%	0.25%

Insider & Institutional Ownership

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 large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Avient pays an annual dividend of $1.10 per share and has a dividend yield of 3.6%. Sumitomo Chemcl pays an annual dividend of $0.28 per share and has a dividend yield of 1.8%. Avient pays out 89.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sumitomo Chemcl pays out 16.2% of its earnings in the form of a dividend. Avient has raised its dividend for 1 consecutive years. Avient is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Avient and Sumitomo Chemcl”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avient	$3.25 billion	0.86	$169.50 million	$1.23	24.67
Sumitomo Chemcl	$17.12 billion	0.30	$254.70 million	$1.73	8.84

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

Summary

Avient beats Sumitomo Chemcl on 13 of the 18 factors compared between the two stocks.

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.

About Sumitomo Chemcl

Sumitomo Chemical Company, Limited engages in Chemicals & Plastics, energy and functional materials, IT-related chemicals, health and crop sciences, pharmaceuticals, and other businesses worldwide. Its Essential Chemicals & Plastics segment offers synthetic resins, such as polyethylene, polypropylene, and polymethyl methacrylate resins; raw materials for synthetic fibers; and various industrial chemicals. The company's Energy & Functional Materials segment provides alumina and aluminum products used for energy products; resorcinol for tires, wood adhesives, flame retardants, and ultraviolet ray absorbants; polymer additives and rubber chemicals; synthetic rubber for tires, shoes, construction materials, and other applications; and engineering plastics and lithium-ion secondary battery materials for use in electronic components and next-generation vehicles. Its IT-Related Chemicals segment provides polarizing films, touch screen sensor panels, and color resists and polymer OLED for LC and OLED displays; photoresists and high-purity chemicals for the semiconductor manufacturing process; and compound semiconductor materials for antenna switches and other components of communication terminal equipment. The company's Health & Crop Sciences segment offers crop protection chemicals, fertilizers, feed additives, and household insecticides; active pharmaceutical ingredients and intermediates; and products to control infectious diseases. Its Pharmaceuticals segment provides prescription and diagnostic pharmaceuticals. The company's Others segment supplies electric power and steam; designs, constructs, and supervises chemical plants; provides transportation and warehousing services; and conducts physical property and environmental analysis. Sumitomo Chemical Company, Limited was founded in 1913 and is headquartered in Tokyo, Japan.