Financial Analysis: Chemours (NYSE:CC) vs. Shin-Etsu Chemical (OTCMKTS:SHECY)

Chemours (NYSE:CC) and Shin-Etsu Chemical (OTCMKTS:SHECY) are both basic materials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Earnings and Valuation

This table compares Chemours and Shin-Etsu Chemical”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chemours	$5.81 billion	0.60	-$386.00 million	($2.48)	-9.30
Shin-Etsu Chemical	$16.82 billion	5.01	$3.56 billion	$0.86	24.66

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

Dividends

Chemours pays an annual dividend of $0.35 per share and has a dividend yield of 1.5%. Shin-Etsu Chemical pays an annual dividend of $0.23 per share and has a dividend yield of 1.1%. Chemours pays out -14.1% of its earnings in the form of a dividend. Shin-Etsu Chemical pays out 26.7% 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. Chemours is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

76.3% of Chemours shares are held by institutional investors. Comparatively, 0.0% of Shin-Etsu Chemical shares are held by institutional investors. 0.9% of Chemours shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Chemours has a beta of 1.41, suggesting that its share price is 41% more volatile than the S&P 500. Comparatively, Shin-Etsu Chemical has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

Profitability

This table compares Chemours and Shin-Etsu Chemical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chemours	-6.41%	41.75%	1.92%
Shin-Etsu Chemical	18.96%	10.75%	8.93%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Chemours and Shin-Etsu Chemical, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chemours	2	5	5	0	2.25
Shin-Etsu Chemical	0	1	0	0	2.00

Chemours currently has a consensus price target of $20.40, suggesting a potential downside of 11.55%. Given Chemours’ stronger consensus rating and higher possible upside, analysts plainly believe Chemours is more favorable than Shin-Etsu Chemical.

Summary

Chemours beats Shin-Etsu Chemical on 9 of the 16 factors compared between the two stocks.

About Chemours

The Chemours Company provides performance chemicals in North America, the Asia Pacific, Europe, the Middle East, Africa, and Latin America. It operates through three segments: Titanium Technologies, Thermal & Specialized Solutions, and Advanced Performance Materials. The Titanium Technologies segment provides TiO2 pigment under the Ti-Pure brand for delivering whiteness, brightness, opacity, durability, efficiency, and protection in various of applications, such as architectural and industrial coatings, flexible and rigid plastic packaging, polyvinylchloride, laminate papers used for furniture and building materials, coated paper, and coated paperboard used for packaging. The Thermal & Specialized Solutions segment offers of refrigerants, thermal management solutions, propellants, foam blowing agents, and specialty solvents. The Advanced Performance Materials segment products portfolio includes various industrial resins, specialty products, membranes, and coatings for electronics, communications, transportation, wire and cable, energy, oil and gas, and medical, and other applications under the eflon, Viton, Krytox, and Nafion brands. The company sells its products through direct and indirect channels, as well as through a network of resellers and distributors. The Chemours Company was incorporated in 2014 and is headquartered in Wilmington, Delaware.

About Shin-Etsu Chemical

Shin-Etsu Chemical Co., Ltd. provides infrastructure, electronics, and functional materials in Japan. It is also involved in processing and specialized related services. The company operates through Infrastructure Materials; Electronics Materials; Functional Materials; and Processing and Specialized Services segments. In addition, it offers cellulose derivatives, synthetic pheromones, aroma chemicals, dielectric and LED/ semiconductor materials, silanes, photoresists, chlorides, caustic soda, liquid fluoroelastomers, polyvinyl chloride and vinyl acetate resin, silicones, and silicones processed goods. Further, the company offers pellicles, photomask blanks, synthetic quartz/ quartz cloth, pyrolytic boron nitride, LIB anode material, and silicon metal. Additionally, it provides rare earth magnets, compound semiconductors, and oxide single crystals. The company was formerly known as Shin-Etsu Nitrogen Fertilizer Co., Ltd. and changed its name to Shin-Etsu Chemical Co., Ltd. in 1940. Shin-Etsu Chemical Co., Ltd. was incorporated in 1926 and is headquartered in Tokyo, Japan.