Eastman Chemical (NYSE:EMN – Get Free Report) and Shin-Etsu Chemical (OTCMKTS:SHECY – Get Free Report) are both materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, dividends, earnings, profitability and risk.
Insider and Institutional Ownership
83.7% of Eastman Chemical shares are owned by institutional investors. Comparatively, 0.0% of Shin-Etsu Chemical shares are owned by institutional investors. 2.6% of Eastman Chemical shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Eastman Chemical and Shin-Etsu Chemical’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Eastman Chemical | 4.99% | 9.46% | 3.78% |
| Shin-Etsu Chemical | 18.39% | 10.49% | 8.62% |
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Eastman Chemical | $8.75 billion | 0.96 | $474.00 million | $3.84 | 19.13 |
| Shin-Etsu Chemical | $17.10 billion | 4.50 | $3.15 billion | $0.83 | 23.34 |
Shin-Etsu Chemical has higher revenue and earnings than Eastman Chemical. Eastman Chemical 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.
Volatility and Risk
Eastman Chemical has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, Shin-Etsu Chemical has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.
Dividends
Eastman Chemical pays an annual dividend of $3.36 per share and has a dividend yield of 4.6%. Shin-Etsu Chemical pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. Eastman Chemical pays out 87.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Shin-Etsu Chemical pays out 24.1% of its earnings in the form of a dividend. Eastman Chemical has increased its dividend for 15 consecutive years. Eastman Chemical is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a breakdown of recent recommendations for Eastman Chemical and Shin-Etsu Chemical, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Eastman Chemical | 0 | 7 | 7 | 0 | 2.50 |
| Shin-Etsu Chemical | 0 | 1 | 0 | 0 | 2.00 |
Eastman Chemical presently has a consensus price target of $79.17, suggesting a potential upside of 7.74%. Given Eastman Chemical’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Eastman Chemical is more favorable than Shin-Etsu Chemical.
Summary
Shin-Etsu Chemical beats Eastman Chemical on 9 of the 17 factors compared between the two stocks.
About Eastman Chemical
Eastman Chemical Company operates as a specialty materials company in the United States, China, and internationally. The company's Additives & Functional Products segment offers amine derivative-based building blocks, intermediates for surfactants, metam-based soil fumigants, and organic acid-based solutions; specialty coalescent and solvents, paint additives, and specialty polymers; and heat transfer and aviation fluids. It serves transportation, personal care, wellness, food, feed, agriculture, building and construction, water treatment, energy, consumables, durables, and electronics markets. Its Advanced Materials segment provides copolyesters, cellulosic biopolymers, cellulose esters, polyvinyl butyral sheets, and window and protective films for value-added end uses in the transportation, durables, electronics, building and construction, medical and pharma, and consumables markets. The company's Chemical Intermediates segment offers olefin and acetyl derivatives, ethylene, and commodity solvents; and primary non-phthalate and phthalate plasticizers, and niche non-phthalate plasticizers for industrial chemicals and processing, building and construction, health and wellness, and food and feed. Its Fibers segment provides cellulose acetate tow, triacetin, cellulose acetate flake, acetic acid, and acetic anhydride for use in filtration media primarily cigarette filters; natural and solution dyed acetate yarns, and staple fiber for use in consumables, and health and wellness markets; and wet-laid nonwoven media, specialty and engineered papers, and cellulose acetate fibers for transportation, industrial, agriculture and mining, and aerospace markets. The company was founded in 1920 and is headquartered in Kingsport, Tennessee.
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.
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